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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2024 (11) TMI AT This

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2024 (11) TMI 397 - AT - Central Excise


Issues Involved:

1. Whether the appellant fraudulently availed Cenvat credit based on fake invoices.
2. Whether the denial of cross-examination of witnesses was justified.
3. Applicability of Section 9D of the Central Excise Act in the proceedings.

Detailed Analysis:

1. Fraudulent Availment of Cenvat Credit:

The primary issue in these appeals was whether the appellant, M/s Mittal Ceramics, fraudulently availed Cenvat credit amounting to Rs. 5,20,512/- based on fake invoices issued by M/s Labh Hi-Tech Metal. The investigation by DGGI/DGGSTI revealed that M/s Labh Hi-Tech Metal allegedly issued invoices showing the sale of excise duty paid MS Scrap, which was not actually received by the appellant. The source manufacturer, M/s Gopal Industries, Bhilai, confirmed that they did not issue any excise invoices to M/s Labh Hi-Tech Metal, suggesting that the Cenvat credit was availed fraudulently. The Adjudicating Authority confirmed the demand for recovery of the inadmissible Cenvat credit along with interest and imposed penalties on the appellants.

2. Denial of Cross-Examination:

The appellant contended that the impugned order was unsustainable as it was passed without allowing cross-examination of key witnesses whose statements were relied upon by the Revenue. The appellant argued that the entire case was based on statements from individuals like Shri Bhupinder Singh, Shri Vishal Batta, and Shri Khushi Ram Sharma, and they were denied the opportunity to cross-examine these witnesses. The appellant cited the judgment of the jurisdictional High Court in Jindal Drugs Pvt. Ltd. v. UOI, which mandates the allowance of cross-examination of material witnesses. The Tribunal noted that the Adjudicating Authority failed to provide a cogent reason for denying cross-examination and emphasized the necessity of following the procedural requirements under Section 9D of the Central Excise Act.

3. Applicability of Section 9D of the Central Excise Act:

The Tribunal highlighted the significance of Section 9D, which governs the relevancy of statements made before a Central Excise Officer. It mandates that such statements can only be admitted as evidence if the person who made the statement is examined as a witness, or if the circumstances outlined in Section 9D(1)(a) are met. The Tribunal referred to the judgment in Jindal Drugs Pvt. Ltd., which underscored the mandatory nature of these provisions and the requirement for a reasoned order if the adjudicating authority chooses to invoke Section 9D(1)(a). The Tribunal found that the Adjudicating Authority did not adhere to these statutory requirements, thereby vitiating the proceedings.

Conclusion:

The Tribunal concluded that the impugned order was not sustainable due to the denial of cross-examination and the failure to follow the mandatory provisions of Section 9D. It set aside the order and remanded the case back to the Adjudicating Authority for a fresh decision, ensuring the appellant is given the opportunity to cross-examine the material witnesses. The Tribunal directed the appellants to cooperate with the Adjudicating Authority for a speedy resolution of the case.

 

 

 

 

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