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2024 (3) TMI 977 - AT - Central ExciseCENVAT Credit - credit denied on the ground that the appellant have taken credit on Aluminium ingots and thereafter it was removed without payment of duty as the same was not used in the manufacture - allegation solely based on the statements of transporter - transporter was not cross-examined - violation of principles of natural justice - Time limitation - Imposition of redemption fine - HELD THAT - The allegation is solely based on the statements of transporter however, the transporter was not cross-examined and as per section 9D of Central Excise Act, 1944. It is mandatory on the part of the Adjudicating Authority to do examination in chief and thereafter allow the noticee for cross-examination for the witness which in the present case was not done by the Adjudicating Authority. Therefore, the statement of transporter cannot be relied upon. Moreover, the entire investigation and the witnesses were used for issuing show cause notice dated 30.08.2011 to Hiren Aluminium wherein the charge was that M/s. Hiren Aluminium has not received ingots sent by the appellant. Accordingly, the Cenvat credit availed by Hiren Aluminium on the same ingots was sought to be denied. The entire chain, right from procurement of aluminium ingots from NALCO upto the delivery of aluminium conductors, the transaction was established and accepted by the Settlement Commission. This finding was given by Settlement Commission after considering the investigation and all the evidences which were also relied upon in the appellant s present case. Therefore, once all those investigation and evidence have been appreciated and Settlement Commission has come to the conclusion as reproduced above, there is no scope for the Adjudicating Authority to rely upon the same evidences for taking contrary view to the findings given by the Settlement Commission and to confirm the demand of Cenvat credit. Therefore there is no material evidence with the department to establish their charge of clandestine removal of ingots on which the appellant has taken Cenvat credit. Time Limitation - HELD THAT - There is no dispute that the present case relates to period February 2008 to March 2008 and entire investigation was carried out in a case made out against Hiren Aluminium in the show cause notice dated 30.08.2011 for denial of Cenvat credit on standard wires wherein there was no allegation that the credit taken on ingots by the appellant was made. Thereafter the appellant was served a show cause notice dated 06.03.2013. In these facts, it is absolutely clear that entire information about the transaction were available with the department way back in October 2008 even then the department took five years to issue show cause notice to the appellant. Therefore, the demand is clearly time-barred. Imposition of redemption fine - HELD THAT - As it is held that the appellant have not cleared aluminium ingots clandestinely and demand on that count is not sustainable consequently, no confiscation can be made and no consequential redemption fine will sustain. Secondly, without prejudice, the goods on which redemption fine was imposed was not available for confiscation - It is settled legal position by the Larger Bench of this Tribunal in the case of SHIV KRIPA ISPAT PVT. LTD. VERSUS COMMISSIONER OF C. EX. CUS., NASIK 2009 (1) TMI 124 - CESTAT MUMBAI as well as in COMMISSIONER OF CUSTOMS, MUMBAI VERSUS RISHI SHIP BREAKERS 2008 (8) TMI 650 - CESTAT, MUMBAI that in case goods are not available, no redemption fine can be imposed therefore, on both counts, redemption fine imposed on the appellant is not sustainable. The impugned order is not sustainable hence, the same is set-aside - Appeal allowed.
Issues Involved:
1. Denial of Cenvat credit on aluminium ingots. 2. Allegation of clandestine removal of inputs. 3. Bar of limitation on demand. 4. Imposition of redemption fine. Summary: 1. Denial of Cenvat credit on aluminium ingots: The appellants were denied Cenvat credit on aluminium ingots initially sold by NALCO to Hiren Aluminium and then to the appellants. The department's case was based on statements from transporters, but these transporters were not cross-examined as required u/s 9D of the Central Excise Act, 1944. The Settlement Commission had previously found that the aluminium ingots were procured from NALCO, converted into wire rods, and then into standard wire, which was used to manufacture aluminium conductors cleared on payment of duty. This established the chain of transactions and negated the department's allegations. 2. Allegation of clandestine removal of inputs: The department alleged that the appellants removed aluminium ingots without payment of duty and without using them in manufacturing. This was based on transporter statements, which were not cross-examined. The Settlement Commission had already concluded that the ingots were used in the manufacturing process, thus the charge of clandestine removal did not hold. 3. Bar of limitation on demand: The demand pertained to the period February 2008 to March 2008, with the investigation completed by October 2008. However, the show cause notice was issued on 06.03.2013, almost five years later. Given that all relevant information was available to the department in 2008, the delay rendered the demand time-barred. 4. Imposition of redemption fine: The Tribunal held that since the appellants did not clandestinely remove aluminium ingots, no confiscation could be made, and consequently, no redemption fine could be imposed. Additionally, the goods were not available for confiscation, aligning with the legal position that redemption fine cannot be imposed if goods are unavailable. Conclusion: The impugned order was set aside, and the appeals were allowed with consequential relief in accordance with the law.
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