2016 (3) TMI 226 - AT - Central Excise

False CENVAT Credit - HR coils/sheets of thickness below 10mm on the basis of invoices without receiving goods - statement of Shri Naresh Singh, Foreman relied upon - appellant pleads that the cross-examination of shri Naresh Singh was denied and that vitiates the proceedings and pleaded that the case should be remanded for de-novo adjudication - Held that - As find that the proprietor himself had categorically admitted in his statement dated 7/10/2006 that he never received any coil or plates of thickness below 10mm in his factory. There was no retraction of the statement nor any allegation that the same was obtained under duress. Not only that in his subsequent statement recorded much later on 2/4/2008, he reiterated that coils of thickens below 10mm were never received in his factory. The second statement also was never retracted. Thus proprietor s statements are of full evidentiary value. His statements fully and decisively establish the alleged offence. As regards the contention of the Advocate, there is no corroborative evidence other than the statement of the proprietor suffice to say that proprietor s statements, voluntary as those are fully and comprehensively cover and sustain the allegation and have full evidentiary value and therefore absence of corroboratory evidence is inconsequential because Revenue does not have to collect evidence beyond what is required to establish the case. In the case of K.I. Pavunny Vs. Astt Collector Cochin 1997 (2) TMI 97 - SUPREME COURT OF INDIA held that confessional statement, if found voluntarily, can form the sole basis for conviction - Decided against assessee

Issues:
1. Denial of CENVAT Credit based on invoices without receiving goods.
2. Alleged offense of taking CENVAT Credit on HR coils/sheets below 10mm thickness.
3. Cross-examination of witnesses.
4. Reliance on proprietor's admission as evidence.
5. Relevance of Chartered Engineer Certificate.
6. Corroborative evidence requirement.
7. Appellate intervention based on the impugned order.

Analysis:

1. The appeal was filed against the order-in-appeal upholding the order-in-original that denied CENVAT Credit of Rs. 10,27,545 based on invoices showing receipt of HR coils/sheets below 10mm thickness without actual receipt of goods. The investigation revealed that the appellant, a manufacturer, did not use such coils/plates. Statements of key personnel confirmed the non-receipt of these materials, leading to the denial of credit and imposition of penalties.

2. The appellant's advocate argued for the cross-examination of a key witness, which was denied, claiming prejudice to the appellant. However, the proprietor's admission in statements, without retraction or duress allegations, provided substantial evidence against the appellant regarding the non-receipt of coils below 10mm thickness. The Chartered Engineer Certificate did not specifically cover the relevant period, weakening its evidentiary value.

3. The issue of cross-examination was addressed, emphasizing the importance of allowing cross-examination when a statement is relied upon against the appellant. While the witness's statement was not admissible due to lack of cross-examination, the proprietor's consistent statements held full evidentiary value, establishing the alleged offense conclusively.

4. The reliance on the proprietor's statements as voluntary and unchallenged provided a strong basis for the denial of CENVAT Credit, as corroborative evidence beyond the proprietor's admission was deemed unnecessary. The legal precedent highlighted the significance of voluntary confessional statements in establishing cases.

5. The Chartered Engineer Certificate, though presented by the appellant, did not specifically address the period under scrutiny, failing to support the claim of receiving coils below 10mm thickness during the relevant timeframe. This lack of alignment with the period in question reduced the certificate's relevance in the case.

6. The absence of corroborative evidence beyond the proprietor's statements did not hinder the case, as the voluntary and consistent admissions by the proprietor sufficed to establish the offense. Legal precedent supported the notion that voluntary confessions could serve as the sole basis for conviction, reinforcing the strength of the proprietor's statements in this case.

7. Ultimately, the appellate tribunal found no infirmity in the impugned order warranting intervention, leading to the dismissal of the appeal based on the substantial evidence provided by the proprietor's unchallenged statements and the lack of necessity for additional corroborative evidence to support the denial of CENVAT Credit.

This detailed analysis of the judgment covers the issues involved comprehensively, highlighting the key legal aspects and evidentiary considerations that influenced the final decision of the appellate tribunal.

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