2008 (9) TMI 740 - AT - Central Excise

Summary

Issues involved: Alleged wrongful availment of Cenvat credit on cement not utilized in the manufacture of final product, denial of cross-examination, violation of principles of natural justice, involvement of authorized signatory, imposition of penalties.

The appellants, engaged in the manufacture of Cement, were alleged to have availed Cenvat credit on cement not utilized in the final product. The adjudicating authority denied credit and imposed penalties under Section 11AC of the Central Excise Act, 1944. The Commissioner (Appeals) upheld the decision. The appellant contended that the cement received was set cement and utilized in the final product, citing the chemical examiner's observation on adulteration and denial of cross-examination as violations of natural justice. The appellant relied on a previous Tribunal decision in a similar case.

The Revenue, represented by the Learned DR, supported the Commissioner (Appeals)'s findings, alleging the use of set cement instead of fresh cement by the appellants. The Revenue claimed the appellants failed to provide evidence of cement utilization from a specific supplier.

Upon review, it was revealed that the appellants indeed used set cement in their manufacturing process, as per the statement of the authorized signatory. However, the supplier denied supplying set cement, and the chemical examiner deemed the mixture adulterated and unsuitable for manufacturing cement. The Tribunal found the chemical examiner's view irrelevant and focused on the lack of evidence regarding cement utilization from the specific supplier. The non-utilization of cement in the final product was detected during an inspection, leading to a justified demand for duty and penalty against appellant No. 1. Appellant No. 2 was found not involved in the evasion of duty, leading to the reversal of the penalty imposed on them.

In conclusion, the appeal of appellant No. 1 was rejected, while the appeal of appellant No. 2 was allowed, based on the findings related to the utilization of cement in the manufacturing process.