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2017 (12) TMI 764 - AT - Central ExciseCENVAT credit - vehicles - the receipt of inputs has been denied only on the ground of the vehicles were not capable of transportation of goods - case of assessee is that in absence of any knowledge and investigation from the author of the computer data relied upon by the Revenue, no demand can be made - Held that - The cross examination of transporters were rejected. The records of the assessee-appellant showed the receipt of inputs and their consumption, which has not been disputed by the Department. The final products which have been cleared on payment of duty are not in dispute. The Revenue has also failed to prove flow back of money for non-receipt of the goods. In the absence of any contrary evidence, the Cenvat credit cannot be denied to the assessee. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Disallowance of Cenvat credit of ?18,85,971/-. 2. Confirmation of demand of ?72,02,038/-. 3. Dropping of demand of ?1,27,29,183/-. 4. Imposition of penalties on other appellants under Rule 26 of Central Excise Rules. Issue-wise Detailed Analysis: 1. Disallowance of Cenvat credit of ?18,85,971/-: The adjudicating authority confirmed the demand of ?18,85,971/- on the grounds that the vehicles shown to have transported the goods were not capable of such transportation, being tankers, tempos, auto rickshaws, and in some cases, mopeds and scooters. The assessee-appellant submitted a chart showing that the vehicle numbers were wrongly mentioned and provided the correct numbers. They argued that some vehicles were trucks converted into tankers and provided printouts from the RTO website and addresses of vehicle owners for verification. The appellant contended that clerical errors in vehicle numbers should not be grounds for denying credit, and the transport documents were prepared based on information from drivers. The Tribunal found that the receipt of inputs was not disputed, and no corroborative evidence was provided by the Department. The Tribunal held that credit cannot be denied based on the vehicle numbers alone and allowed the appeal of the assessee-appellant. 2. Confirmation of demand of ?72,02,038/-: The demand was based on the allegation that the assessee-appellant had cleared raw materials and finished goods to M/s AVM Brothers and others. The reliance was placed on transit passes from M/s Dashmesh Roadlines and computer data seized from the assessee-appellant's premises. The appellant argued that the statement of Shri Sushil Motwani, relied upon in the SCN, indicated that he was not concerned with maintaining the details. The cross-examination of the transporter was denied, and no investigation was conducted from M/s AVM Brothers or other recipients. The Tribunal found that the transit passes and computer data alone were insufficient to sustain the demand without proper investigation and cross-examination. The Tribunal held that the demand was not sustainable and allowed the appeal of the assessee-appellant. 3. Dropping of demand of ?1,27,29,183/-: The Revenue appealed against the dropping of the demand on the grounds that the assessee-appellant had fraudulently availed credit without receipt of goods. The reliance was placed on statements of employees of M/s Signet Overseas Ltd. (SOL) and records from SOL. The assessee-appellant sought cross-examination of the main transporter and other transporters, which was denied. The Tribunal found that the adjudicating authority rightly held that demands based on third-party statements and records were not sustainable. The Tribunal upheld the view that demands cannot be made solely on third-party documents without corroborative evidence. The Tribunal dismissed the Revenue's appeal. 4. Imposition of penalties on other appellants under Rule 26 of Central Excise Rules: Since the main appeal of the assessee-appellant was allowed, the penalties imposed on the other appellants, namely Shri Rajneesh Agarwal, Shri Mukesh Sangla, and M/s AVM Brothers, were set aside. The Tribunal allowed their appeals and disposed of all appeals accordingly. Conclusion: The Tribunal set aside the impugned order confirming the demands against the assessee-appellant and allowed their appeal. The Revenue's appeal was dismissed. The penalties imposed on other appellants were also set aside, and their appeals were allowed.
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