CESTAT says third party evidence cannot replace statutory records

The Revenue alleged that Taha Wires had not received imported copper inputs at its Daman factory and had instead diverted them and substituted locally procured scrap. 

CESTAT found that the allegation was not supported by evidence of any actual diversion, substitute procurement, financial flow-back or shortage of stock. Against this, the assessee had statutory records, bank payments, transport documents and job-work records evidencing receipt and use of the inputs. 

The Tribunal therefore held that the Revenue could not deny Cenvat credit on the basis of uncorroborated third-party evidence and dismissed the appeals against the co-noticees.