2016 (10) TMI 476 - AT - Central Excise

Demand on account of clandestine clearance of scrap - Held that - a certificate issued by chartered engineer certifying that the factory of the appellant is not able to manufacture such huge scrap during the impugned period. Shri Amajit Singh Bajaj, in the course of examination has denied of purchasing scrap from the appellant. Moreover he has admitted that he has supplied only tempo for transportation of the scrap and received transportation charges from the appellant. In absence of evidence of procurement of excess inputs and clearance of excess finished goods on record, the demand on account of clandestine clearance of scrap is not sustainable. Denial of credit on HR/CR coil - allegation that the appellant has received the invoices and not inputs - Held that - the appellant has taken the defence that these HR/CR coil has been sent to job work for cutting/slitting. The job charges have been paid and the goods have been received from the job worker against job work challan. These evidences had not been given credence by the adjudicating authority during the course of adjudication. The adjudicating authority has only relied on the statement that the appellant has not received HR/CR coils. It is admitted position that the appellant has not received HR/CR coil in the factory and the same has been sent to the job worker directly for cutting/slitting. These facts have not been considered by the adjudicating authority. It is also found that there is statement of supplier of coil that they have supplied these coils to the appellant but no statement of the transporter has been recorded to find out the truth. In the absence of such positive evidence, the evidence produced by the appellants are having evidentiary value - Therefore, the credit on HR/CR coil cannot be denied to the appellants. The demand on account of goods received and cleared without cover of invoices - parts cleared on payment of duty but later these parts have come back for repairs and further they have been cleared without payment of duty as the second time duty is not required to be paid - Held that - in the absence of any documentary evidence in support of the appellant s contention, the defence taken by the appellant is not admissible - the demand of ₹ 13,698/- confirmed. The demand of duty of ₹ 32,61,960/- confirmed on account of shortage of inputs detected during verification of stock confirmed - the demand of duty of ₹ 13,698/- confirmed on account of clandestine clearance of auto parts which is appropriated is confirmed - the demand of interest confirmed for the amount of duty demanded hereinabove - other demands including penalty set aside - appeal disposed off - decided partly in favor of appellant.

2018 (11) TMI 1205 - AT

Issues Involved:
1. Clandestine clearance of scrap.
2. Disallowance of Cenvat credit due to non-receipt of inputs.
3. Clearance of goods without invoices.

Issue-wise Detailed Analysis:

Issue No. 1: Clandestine Clearance of Scrap

The demand for duty on the clearance of scrap was based on entries made in a slip pad recovered from a security supervisor and statements from Shri Amarjit Singh Bajaj, who initially confirmed purchasing the scrap. Both statements were later retracted but subsequently reaffirmed. The appellant argued that their factory could not produce such a large quantity of scrap, supported by a certificate from a chartered engineer. During cross-examination, Shri Amarjit Singh Bajaj denied purchasing scrap and admitted to only providing transportation services. The Revenue did not present any evidence of excess raw material procurement or finished goods clearance without payment of duty. Given the lack of corroborative evidence from the Revenue and the appellant's supporting documents, the demand on account of clandestine clearance of scrap was deemed unsustainable and set aside.

Issue No. 2: Disallowance of Cenvat Credit

The denial of Cenvat credit was based on the allegation that the appellant received only invoices and not the actual inputs, specifically HR/CR coils. The appellant contended that they sent the HR/CR coils directly to job workers for cutting/slitting and received the sheets back, supported by job work challans and payment records. The adjudicating authority did not consider these documents and relied solely on statements that the appellant did not receive HR/CR coils in their factory. The Tribunal found that the appellant provided sufficient evidence of receiving the inputs through job workers and noted the absence of contrary evidence from the Revenue. Therefore, the denial of Cenvat credit on the allegation of non-receipt of inputs was set aside.

Issue No. 3: Clearance of Goods Without Invoices

The demand of ?13,698/- was based on the clearance of auto parts without payment of duty. The appellant claimed these parts were initially cleared on payment of duty, returned for repairs, and then cleared again without payment of duty. However, the appellant failed to provide documentary evidence to support this claim. Consequently, the demand of ?13,698/- was confirmed.

Final Judgment:

The Tribunal modified the impugned order as follows:

(a) The demand of ?50,23,955/- for wrong availment of credit by the Ludhiana unit was set aside.

(b) The demand of ?17,60,447/- for wrong availment of credit by the Gurgaon unit was set aside.

(d) The demand of duty of ?32,61,960/- for the shortage of inputs was confirmed.

(e) The demand of ?13,698/- for clandestine clearance of auto parts was confirmed.

(f) The demand for interest on the confirmed amounts of duty was upheld.

(g) No penalties were imposed on the appellants, and all penalties were set aside.

The appeals were disposed of with these observations.

(Pronounced in the open court on 23.08.2016)

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