Excise Dept Fails to Probe 90 of 160 Transactions,

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has upheld a company's claim for CENVAT credit, citing a significant failure in the investigation conducted by the excise department. The department had alleged that the company had availed fraudulent credit based on transactions with a non-existent vendor. However, the tribunal noted that the department had failed to investigate the vast majority (over 90%) of the 160 transactions in question. Furthermore, the department did not make the vendor a co-noticee in the proceedings, which denied the assessee an opportunity to cross-examine them. The CESTAT concluded that in the absence of a thorough investigation and without disproving the documentary evidence provided by the assessee, the allegations could not be sustained. This ruling emphasizes that the burden of proof lies with the revenue department and that credit cannot be denied based on an incomplete or flawed investigation.