2017 (11) TMI 984 - AT - Central Excise

Natural justice - cross-examination - CENVAT credit - fake documents - Held that - Sh. Ramesh Chand Aggarwal has categorically stated that during the period from February to March 2003, they have not received the goods along with invoices but for rest of the demand, he has not admitted, in that circumstances, the demand on account of denial of Cenvat Credit for the period February to March 2003 on the invoices issued by Sh. Rupesh Bansal in the name of various firms is denied - interest and penalty also upheld. For rest of the demand, the matter needs fresh adjudication at the end of the adjudicating authority after granting cross-examination of the persons namely Sh. Rupesh Bansal and transporters as the same is required to be provided to the appellant for fair adjudication. Partly decided against appellant and part matter on remand.

Summary

Issues:
Appeal against denial of Cenvat Credit and imposition of penalties.

Analysis:
The appellants contested the denial of Cenvat Credit and imposition of penalties based on an investigation that revealed discrepancies in the invoices issued by Sh. Rupesh Bansal to various firms. The investigation indicated that goods were not actually supplied along with the invoices, leading to the denial of Cenvat Credit amounting to ?40,54,339/- and penalties. The appellants sought cross-examination of key witnesses, including Sh. Rupesh Bansal and transporters, whose statements were pivotal in the case. The appellants argued that the denial of cross-examination violated the principle of natural justice, citing the Jindal Drugs Pvt. Ltd. case. The Revenue, however, contended that the admission by Sh. Ramesh Chand Aggarwal, an authorized signatory of the appellants, negated the need for further proof through cross-examination.

The Tribunal examined the arguments presented by both parties and concluded that while Sh. Ramesh Chand Aggarwal admitted to not receiving goods along with invoices during a specific period, he did not admit to the entirety of the demands made. Consequently, the Tribunal upheld the denial of Cenvat Credit for the period in question, imposed interest on the admitted amount, and confirmed penalties. However, recognizing the appellants' right to a fair adjudication process, the Tribunal ordered the adjudicating authority to allow cross-examination of crucial witnesses for the remaining demands. The Tribunal emphasized the importance of providing the appellants with the opportunity for cross-examination to ensure a just and lawful adjudication process.

In the final decision, a demand of ?4,51,250/- along with interest was confirmed, and penalties were upheld against M/s Singhal Strips Ltd. and Sh. Ramesh Chand Aggarwal. For the unresolved demands, the matter was remanded back to the adjudicating authority for further examination post cross-examination. The appeals were disposed of accordingly, with a clear directive for a fair and thorough adjudication process in accordance with the law.