2014 (11) TMI 242 - AT - Central Excise

Denial of CENVAT Credit - Invoices issued by two dealers - Held that - Revenues case is mainly based upon the statements recorded during investigations. The finding portion of the impugned order refers to certain developments and evidence to come to conclusion that the manufacturing units were availing credit without actual receiving the goods. Some of the manufacturing units have taken a strong objection to the fact that they were not even using the scrap generated at the washer manufacturing units and as such, the allegations and findings are general in nature. We also note that Commissioner has not dealt with the evidence available and relatable to each and every manufacturing unit and by making general observation credit stand denied to such units. Further, the deponents of the statements have also not been offered for cross examination. impugned order of the Commissioner is not dealing with the evidence available in each and every case and the observation made by him are too general without relating to transactions in the bank accounts and without even referring to alternative source of procurement of raw materials, we deem it fit to set aside the impugned order and remand all the matters to the Commissioner for fresh decision - Following decision of CCE vs. Juhi Alloys Ltd. 2014 (1) TMI 1475 - ALLAHABAD HIGH COURT , Luxmi Metal Industries vs. CCE, Delhi II 2013 (3) TMI 143 - CESTAT NEW DELHI and Rajan Engineering Works vs. CCE, Faridabad 2011 (7) TMI 626 - CESTAT, DELHI - Decided in favour of assessee.

Summary

Issues:
Denial of Cenvat credit based on invoices issued without corresponding supply of inputs; Penalties imposed on dealers; Lack of detailed evidence and cross-examination in impugned order.

Analysis:
The judgment pertains to multiple appeals arising from the denial of Cenvat credit to various manufacturers due to invoices issued by two dealers without the corresponding supply of inputs. The Commissioner imposed penalties on the dealers in question. The investigations revealed incriminating documents and statements admitting to the issuance of cenvatable invoices without actual physical movements of goods. The Revenue's case primarily relied on these statements, leading to proceedings against both the manufacturing units and the dealers.

Upon reviewing the impugned order and considering submissions from both sides, the Bench found shortcomings in the Commissioner's decision. The order lacked a detailed analysis of evidence specific to each manufacturing unit, with general observations leading to the denial of credit. Moreover, the deponents of statements were not offered for cross-examination, raising procedural concerns. The appellants cited relevant legal precedents, including decisions from the Hon'ble High Courts and previous Tribunal rulings, to support their case.

In light of the inadequacies in the impugned order, the Bench set aside the decision and remanded all matters to the Commissioner for a fresh decision. The Commissioner was directed to consider the evidence in detail, examine bank accounts, and provide clear findings regarding transactions and the source of raw materials procurement. The appellants were ensured an opportunity to present their case, and the adjudicating authority was instructed to address the plea for cross-examination of deponents.

The judgment emphasized the need for a thorough examination of evidence, adherence to legal principles established in prior decisions, and the importance of procedural fairness in adjudicating such matters. All appeals were remanded for further proceedings in accordance with the directions provided by the Bench.