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2022 (3) TMI 1483 - AT - Central ExciseFraudulent availment of Cenvat credit - invoices issued by M/s Suraj Ltd without receipt of goods - case of revenue is also on the ground of transporters admission that the goods were not supplied to the appellant - Retraction of statements and print outs which was recovered from the computers of M/s Suraj Ltd - pre-ponderance of probability - allegation of suppression with the intention to avail undue credit or not - extended period of limitation - HELD THAT - The goods received from M/s Suraj Ltd. properly recorded in the books and accounts of the Appellant. Further the Director of Suraj Ltd. during the cross-examination admitted the supply of goods to the Appellant - it is established that the appellant have received the inputs from M/s Suraj Ltd. in their factory. The appellant have recorded the receipt of the goods in their cenvat account i.e. RG-23A-Pt. I and Pt. II and the said disputed inputs used in the manufacture of dutiable goods. The purchase of the goods under the invoices in question were accounted for in in books of account. The payment against the said invoices were made through cheques. The Revenue could not bring any evidence that the goods covered under the invoices were diverted to any other place. It is also not the case of the department that the appellant have procured some unaccounted inputs to cover up the quantity of input shown in the invoices. There is no evidence that the inputs shown in the invoices received by the appellant were not used in the manufacture of final product. Department has not disputed the correctness of quantity manufactured by the appellant recorded in their daily stock account - The supply of disputed goods has been admitted by the supplier namely M/s Suraj Ltd. that they have supplied the goods to the appellant along with the duty paid invoices. In that situation, we are of the view that the have taken proper care while receiving the goods in their factory to avail the Cenvat Credit. Section 36B (2) provides the conditions in respect of computer printouts. But, the said procedure has not been followed by the Revenue while relying on the said computer printout /ledgers. Therefore, the said printouts cannot be the piece of evidence to demand cenvat credit from the appellant. As can be seen, one of the conditions for the computer printout to be an admissibleevidence is that the said printout should have been produced by the computer during the period over which the computer was used regularly to store or process information for the purposes of any activities regularly carried on over that period by the person having lawful control over the use of the computer - There is also no investigation to find out whether the said computer data were forming part of the regular books of accounts maintained by the appellant and already found placed in these books. Further no statement of person was recorded who maintained the said data in computer. Therefore on the basis of said computer printout sheet demand of cenvat credit is not sustainable. The Learned Adjudicating authority for denial of Cenvat Credit to Appellant also relied upon the documents/ records and statements of transporter. It is found that apart from the above, there is no other evidence to reflect upon the fact that the inputs were not actually received by the appellant. However, on the basis of transporters records and their statements itself, cannot be held to be sufficient for arriving at conclusion that the inputs were never transported to the appellant s factory. All the documentary evidence on record supports the appellant s case about the receipt of the input whereas there is no independent corroborative evidence by the Revenue produced on record. From the cross-examination records, it is also found that transporters also admitted that they have transported the goods from M/s Suraj Ltd. to Appellant company and vice -versa. The impugned order denying Cenvat credit and ordering its recovery along with interest and imposing penalties cannot be sustained - Appeal allowed.
Issues Involved:
1. Alleged fraudulent availment of Cenvat Credit by the appellant. 2. Admissibility and reliability of evidence, including computerized printouts and statements. 3. Physical receipt and utilization of goods by the appellant. 4. Legal validity of the adjudicating authority's reliance on statements and documents. 5. Applicability of penalties and interest under Central Excise law. Issue-wise Detailed Analysis: 1. Alleged Fraudulent Availment of Cenvat Credit: The appellant, engaged in manufacturing stainless steel products, was accused of availing Cenvat Credit based on invoices from M/s Suraj Ltd. without actual receipt of goods. The investigation by DGGSTI revealed that M/s Suraj Ltd. issued sales invoices without supplying the corresponding goods, leading to a show cause notice for recovery of Cenvat credit amounting to Rs. 8,14,80,722/- along with interest and penalties. The adjudicating authority confirmed the demand, which the appellant contested, arguing that the credit was availed on actual receipt of goods and used in manufacturing final products. 2. Admissibility and Reliability of Evidence: The appellant contended that the department's case was based on mere suspicion and statements without cogent or physical evidence. The cross-examination of transporters and the director of M/s Suraj Ltd. confirmed the actual supply of goods. The appellant also highlighted that the statements were recorded under duress, supported by CCTV footage. The Tribunal found that the computerized printouts seized from M/s Suraj Ltd. did not meet the conditions under Section 36B of the Central Excise Act, 1944, making them inadmissible as evidence. 3. Physical Receipt and Utilization of Goods: The appellant demonstrated that all scrap received was duly accounted for in their books and used in manufacturing final products. The stock-taking by DGCEI officers did not reveal any discrepancies in raw material stock. The Tribunal noted that the goods were recorded in the appellant's cenvat account and used in manufacturing, with payments made through cheques. The department failed to provide evidence of goods being diverted or replaced, supporting the appellant's claim of actual receipt and utilization of inputs. 4. Legal Validity of Adjudicating Authority's Reliance: The Tribunal criticized the adjudicating authority's reliance on retracted statements and unauthenticated computerized printouts. The cross-examination of M/s Suraj Ltd.'s director revealed that the statements were recorded under pressure and threat of arrest. The Tribunal emphasized that the adjudicating authority did not properly examine the conditions under Section 36B for admissibility of computerized evidence. The Tribunal also noted that the department did not investigate the regularity of the computer data or record statements from the person maintaining the data. 5. Applicability of Penalties and Interest: The Tribunal found that the appellant's payment of duty on final products and proper accounting of inputs contradicted the department's allegations of fraudulent credit. The absence of any contrary evidence or investigation into the replacement of inputs led the Tribunal to conclude that the denial of Cenvat credit was unsustainable. The Tribunal set aside the impugned order, allowing the appeals with consequential reliefs. Conclusion: The Tribunal concluded that the denial of Cenvat credit and the imposition of penalties and interest were not justified. The evidence provided by the department was deemed inadmissible and insufficient to prove non-receipt of goods. The appellant's proper accounting and utilization of inputs, along with the lack of contrary evidence, led to the setting aside of the adjudicating authority's order. The appeals were allowed, providing relief to the appellant.
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