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2024 (4) TMI 1037 - CESTAT KOLKATADenial of irregularly availed CENVAT Credit - allegation on the ground that there was no manufacturing facility in factory premises and appellant was engaged only in paper transactions - cross-examination of statement of witnesses not allowed - HELD THAT:- In this case the appellant has intimated suspension of their manufacturing activities vide letter dated 10.07.2008 and thereafter surrendered their registration on 01.08.2008 and whole of the investigation have been started thereafter. Moreover, the appellant has procured inputs from various dealers, manufacturers and suppliers and made payments through account payee cheques and investigation was conducted at their end and no inculpatory statement has been made by the supplier of the goods. Further, the appellant has supplied to various recipients of the goods whose investigation was also conducted at their end - It is also evident on record that whatever Cenvat credit has been taken by the appellant, the appellant has utilized the same for payment of duty on the clearance of the goods and also paid sufficient amount of duty through PLA. The case of the Revenue is based only on the statements of certain transporters and on assumption and presumption that as no machinery was found at the time of investigation, the appellant was involved only on paper transactions and certain transporters have made inculpatory statements against the appellant - It is found that the transporters were not allowed to be crossexamined by the appellant in terms of section 9D of the Central Excise Act, 1944 which prescribes that to rely on the statement of a witness, the witness has to be tested by recording their statement at the time of adjudication in chief and thereafter to offer for cross-examination which has not been done in this case, therefore, the statement of the transporters which are inculpatory cannot be relied upon in terms of Section 9D of the Act. The appellant is entitled to take Cenvat credit which has been utilized for payment of duty and the appellant has paid duty through PLA also. In that circumstances, the impugned proceedings are not sustainable - the demand on account of denial of Cenvat Credit is set aside, as the demand against the appellant is not sustainable, therefore, penalty on the appellants are not imposable. Moreover, the appellant No.1 is the proprietor of the appellant No.2, therefore, penalty on both the appellant is also not sustainable in the facts and circumstances of the case. The impugned demand confirmed and penalty imposed on the appellant are set aside - Appeal allowed.
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