2015 (2) TMI 1110 - HC - Central Excise

Wrong availment of cenvat credit - non receipt of inputs - Validity of order of tribunal - tribunal mechanically and causally approved the findings in the Order-in-Original - it was submitted that the Tribunal rendered its judgment after a good five months of the conclusion of the hearing of the appeal. Such a long gap therefore, is bound to result in inconsistencies, errors and omission to refer to vital materials placed on record. Held that -  We are not in agreement with Mr. Nankani that the Tribunal, while affirming a finding of fact as recorded in the Order-in-Original, has omitted from consideration anything which is relevant or germane to this issue. Further, its findings cannot be termed as vitiated by non-application of mind. They are not palpably, erroneous, as contended, as well. In that regard, there is merit in the contention of Mr. Jetly, that this appeal is nothing but an attempt at re-appreciation and reappraisal of the factual findings. Once the Tribunal has found that the transportation as claimed and of the goods has not taken place at all, then, coupled with other materials, the Tribunal rightly arrived at the conclusion that there has been a wrongful availment of Cenvat credit. In the circumstances, we do not think that the Tribunal s order can be termed as perverse. - Decided against the appellant.

Summary

Issues Involved:
1. Allegation of wrongful availment of Cenvat credit on inputs not received in the factory.
2. Allegation of clandestine removal of finished goods.
3. Tribunal's delay in rendering the judgment and its impact on findings.
4. Tribunal's reliance on Standard Input Output Norms (SION).
5. Tribunal's handling of evidence and cross-examination of witnesses.
6. Calculation and reworking of the quantum of wrongful Cenvat credit.

Detailed Analysis:

1. Allegation of Wrongful Availment of Cenvat Credit on Inputs Not Received in the Factory:
The appellant challenged the Tribunal's confirmation of the Order-in-Original, which alleged wrongful availment of Cenvat credit on inputs not physically received in the factory. The Tribunal found sufficient material indicating that the credit availed was related to inputs not received or used in the factory. The Tribunal's findings were based on the investigation, statements, and other materials on record, leading to the conclusion that the transportation of goods as claimed did not occur. Consequently, the Tribunal's agreement with the Commissioner's findings was upheld, and no substantial question of law was found to interfere with the Tribunal's order.

2. Allegation of Clandestine Removal of Finished Goods:
The Tribunal also dealt with the second allegation regarding the clandestine removal of dutiable goods without payment of duty. The Tribunal relied on various statements and documents, including those from M/s. Saini Road Carriers, confirming that some materials were not billed or transported as claimed. The Tribunal's cumulative reliance on these materials led to the conclusion that discrepancies and errors in the documents revealed that some materials were never transported or were transported to distinct parties.

3. Tribunal's Delay in Rendering the Judgment and Its Impact on Findings:
The appellant argued that the Tribunal rendered its judgment five months after the hearing, leading to potential inconsistencies and errors. While the court acknowledged the delay and suggested that the Tribunal should avoid such delays, it did not find any reason to interfere with the orders of both the Commissioner and the Tribunal due to the delay. The court emphasized that the findings were not vitiated by non-application of mind or palpable errors.

4. Tribunal's Reliance on Standard Input Output Norms (SION):
The appellant contended that the Tribunal extensively relied on SION norms, which were irrelevant for the matter. However, the court found that SION norms were only one of the relevant tests and norms used to establish the importation of raw materials and their correlation with the obligation of the importers for export. The court did not find anything objectionable in the Tribunal's reference to SION norms.

5. Tribunal's Handling of Evidence and Cross-Examination of Witnesses:
The appellant complained about the non-availability of transporters for cross-examination. The court found that the Tribunal's reliance on the statements of transporters, staff, and technical persons was justified. The court emphasized that no prejudice was caused to the assessee by not making available persons for cross-examination, and there was no breach of principles of natural justice.

6. Calculation and Reworking of the Quantum of Wrongful Cenvat Credit:
The appellant argued that the Tribunal should rework the quantum of wrongful Cenvat credit, as there was an approximation in relation to 84 Metric Tons of inputs. The court reviewed the written submissions and found no reason to direct any reworking of the quantum of wrongful credit. The court noted that the Order-in-Original and the Tribunal had already carried out the necessary exercise to establish the correlation of the transported and received inputs.

Conclusion:
The court dismissed the appeal, finding no substantial question of law. The concurrent findings of the Commissioner and the Tribunal were upheld, and no miscarriage of justice or prejudice was demonstrated. The appeal was dismissed with no costs.