2017 (9) TMI 220 - AT - Central Excise

CENVAT credit - inputs - duty paying documents - it was alleged that the inputs brought by them into their factory on the strength of certain documents issued by the registered dealers were not the same on which the Central Excise duty was originally paid - Held that - the quality and description of the goods have been admitted to be different in the statement given by the Director of the company. The said statement has not been retracted. In these circumstances, even without relying upon the statement of the dealer and their agents, charges are proved against the appellants and thus statement of dealers and agent become irrelevant - this was not a case which required cross-examination. The Directors themselves admitted the guilt. So, almost all allegations stood proved - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against confirmation of demand of Cenvat Credit and imposition of penalty.

Analysis:
1. The appeals were filed against the confirmation of demand of Cenvat Credit and imposition of penalty. The issue arose when the appellants were alleged to have brought inputs into their factory with documents showing that Central Excise duty was paid on different goods. The appellant's counsel argued that they reversed the credit upon notification and sought cross-examination of registered dealers and their agent, citing a Supreme Court decision. The Revenue, however, argued that the Director admitted the discrepancy in goods received, which was evident from the invoice and not retracted. The dispute centered on whether the appellants were fully aware and involved in the alleged activities.

2. The Tribunal analyzed the submissions and found that the appellants consistently purchased goods over a long period at prices significantly lower than the dealer's purchase price. The defense of different lots from the same consignment at varying prices was not considered valid, especially when the quality and description of goods were admitted to be different in the Director's statement. The Tribunal referred to a Bombay High Court case to support the confirmation of demand based on the Director's admission, disregarding the need for cross-examination of the dealers and agents. The Tribunal concluded that the appellants' guilt was established, as the statements were not disputed or retracted, making cross-examination unnecessary.

3. The Tribunal emphasized that the denial of cross-examination did not prejudice the appellants, as the Directors themselves admitted to the discrepancies. The Tribunal rejected the argument that the denial of cross-examination raised a substantial question of law, stating that in this case, it was not necessary. The judgment was upheld, and the appeals were dismissed. The decision highlighted the importance of admissions by the parties involved and the weight given to such statements in establishing guilt, even without the need for cross-examination in certain circumstances.