2018 (7) TMI 1361 - AT - Central Excise

Clandestine removal - PVC Resins - Revenue s case is based upon the entries made in the said Kaccha Slips, recovered from the premises of the assessee - Held that - The said Kaccha Slips are admittedly written in hand writing of Shri Rajender Singh, foreman of the appellant. He has not been examined as regards the entries made therein. On the other hand, the statement of the Director clearly deposed that the said entries related to movement of the goods within the factory premises. As regards, the statement of the buyers, it stands deposed by them that they have availed the Cenvat credit based upon the invoices issued by the present appellant, without corresponding receipt of the raw-material. The said depositions of the buyers are contrary to the allegations made by the Revenue which are to the effect that the appellant has cleared the raw-material, without the reversal of the Cenvat credit availed by them. If the buyers have not received the raw-material, the Revenue has failed to show as to where the said clandestinely remove raw-material has gone to. Also, during the time of visit of the Investigating Officer, no discrepancy was found and detected by the Officers in the stock of the raw-material. In this scenario, the allegations as regards the removal of raw-material cannot be upheld. Appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged clandestine removal of raw-material, denial of Cenvat credit, imposition of penalties

In this case, the appellant, engaged in manufacturing PVC Compound & Master Batches, faced proceedings initiated by the Revenue based on entries in Kaccha Slips indicating clandestine removal of PVC Resins. The Original Adjudicating Authority confirmed the demand, upheld by the Commissioner (Appeals), and remanded by the Tribunal to the Commissioner (Appeals), leading to the present impugned order. The Revenue relied on Kaccha Slips entries, statements of individuals, and buyers' admissions to support the denial of Cenvat credit. The appellant contested the allegations, highlighting discrepancies in statements and lack of concrete evidence. The Tribunal noted discrepancies in evidence, lack of examination of key individuals, and contradictory statements by buyers, ultimately setting aside the impugned orders due to insufficient evidence supporting the Revenue's claims.

The Revenue's case primarily relied on Kaccha Slips entries authored by the Foreman, which were not examined, and statements of buyers admitting to availing Cenvat credit without receiving raw-material. However, the Director clarified that the entries pertained to internal movements within the factory, undermining the Revenue's allegations. The Tribunal also considered a previous decision favoring the appellant regarding Cenvat credit denial. The driver's statement lacked crucial details, and the appellant's maintenance of statutory records further weakened the Revenue's case, as no discrepancies were found during inspection. Consequently, the Tribunal found the Revenue's arguments unsubstantiated and allowed the appeals, overturning the impugned orders and granting relief to the appellant.