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2019 (7) TMI 2011 - AT - Central ExciseCENVAT Credit - appellant has not received the Cenvatable goods but only invoices were procured - HELD THAT - The department although has obtain statement of Shri Amit Gupta and also the transporter of the goods, who have denied to have supplied the Cenvatable goods to the appellant. The Department has not adduced any evidence regarding compliance of provisions of Section 9D of the Central Excise Act before the statement were admitted evidence. It has been held in the number of cases including ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II 2015 (10) TMI 442 - SUPREME COURT and SKYRISE OVERSEAS PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS (PORT) 2017 (11) TMI 1012 - CALCUTTA HIGH COURT wherein it is held that without complying the Section 9D the reliance cannot be placed on such statements - reliance cannot be placed on the statement of these persons. It is on record that appellant has manufactured the excisable goods and cleared them on payment of duty which is not disputed by the Department. The department has not found the other sources of raw material/ inputs procured by the Appellant - thus, it will not be appropriate to hold that the appellant has not procured the goods from the companies belonging to Shri Amit Gupta (other Appellant No.). The impugned order is not sustainable and is accordingly being set aside - appeal allowed.
Issues:
- Appeal against order upholding rejection of appeal by original Adjudicating Authority - Allegations of passing on inadmissible Cenvat Credit - Admissibility of statements recorded during investigation - Compliance with provisions of Cenvat Credit Rules and Central Excise Rule - Reliance on judgments in support of contentions - Principles of natural justice regarding provision of documents to the appellant - Proper service of notice - Imposition of penalty based on coerced statements - Connection of appellant with registered dealer for credit availment - Reliance on statements without compliance with Section 9D of Central Excise Act - Procurement of goods by the appellant - Compliance with Rule 9(3) of Cenvat Credit Rules Analysis: The appeal challenged the order of the Commissioner of Central Excise and Central Goods and Service Tax upholding the rejection of the appeal filed by the Appellants. The case revolved around allegations of passing on inadmissible Cenvat Credit by the appellant company, which was engaged in the manufacturing of 'Copper Wires.' The investigation revealed that the appellant had received invoices without physical receipt of goods, leading to fraudulent availment of credit in contravention of Cenvat Credit Rules and Central Excise Rule. The appellant disputed the allegations, citing genuine transactions conducted through proper banking channels and challenging the coercion behind statements obtained during the investigation. The Departmental Representative supported the impugned order, asserting that the appellant had not physically received the goods but only procured invoices for credit availment. However, the Tribunal, after considering the submissions and case record, found discrepancies in the Department's evidence. The Tribunal noted that the Department failed to provide evidence of compliance with Section 9D of the Central Excise Act before relying on statements obtained, leading to a lack of reliance on those statements. The Tribunal also highlighted the appellant's compliance with payment of duty and lack of evidence regarding other sources of raw materials procured by the appellant. Moreover, the Tribunal referenced relevant case laws to support its decision, emphasizing the importance of reasonable steps taken by the appellant to ensure the legitimacy of inputs for which Cenvat credit was claimed. The Tribunal concluded that the impugned order was unsustainable and set it aside, thereby allowing the appeals of the appellants. As the main appellant's appeal was deemed unsustainable, there was no basis for imposing penalties on any other appellant involved in the case. The judgment highlighted the significance of compliance with Rule 9(3) of the Cenvat Credit Rules in determining the legitimacy of credit availment based on reasonable steps taken by the appellant.
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