2017 (4) TMI 1173 - HC - Central Excise

Principles of natural justice - denial of cross-examination of the supplier / manufacturer / dealer / transporters whose statements were relied upon while adjudicating the SCN - Held that - the record of the proceedings before the adjudicating authority would indicate that at no stage any request was made to summon a particular person for cross-examination whose statement was attempted to be used by the Revenue - he reasons assigned so as to confirm the finding of the adjudicating authority cannot be termed as perverse or vitiated by any error of law. CENVAT credit - denial on the ground that it availed cenvat credit on the strength of invoices without receiving duty paid scrap under the invoices - Held that - it is established and proved that the appellant received bazar scrap and not scrap under the invoices. The names of those entities who supplied the bazar scrap are also set out in the Tribunal s order - the appellant s role has been pinpointed and with specific details regarding not accounting for those inputs which are mentioned in the invoices while availing of the cenvat credit - This was a systematic fraud and detected during the course of the investigation in which the appellant was clearly involved. The findings of fact are not perverse or vitiated by any error of law apparent on the face of the record raising any substantial question of law - appeal dismissed - decided against appellant.

Summary

Issues:

1. Alleged violation of principles of natural justice by not allowing cross-examination of witnesses.
2. Availment of cenvat credit without receiving duty paid scrap.

Issue 1: Alleged violation of principles of natural justice by not allowing cross-examination of witnesses

The appellant raised a concern regarding the violation of natural justice principles due to the lack of opportunity for cross-examination of witnesses. However, the Tribunal found that the appellant failed to specifically request the summoning of any particular person for cross-examination during the proceedings. The Tribunal concluded that the reasons for confirming the findings of the adjudicating authority were not erroneous or perverse. The Tribunal highlighted that the appellant's plea was vague and lacked specific details or named individuals for cross-examination. Therefore, the Tribunal dismissed this ground as it did not raise any substantial question of law.

Issue 2: Availment of cenvat credit without receiving duty paid scrap

The appellant contended that it was unaware of any fraudulent activities related to the purchase of scrap from a third party, which led to the denial of cenvat credit. The Tribunal found that the appellant had availed credit based on invoices from a registered dealer, M/s. Scor Taur Impex, who, in turn, purchased scrap from M/s. New Siddhivinayak Rerolling Mills. Investigations revealed that the appellant received non-duty paid local scrap instead of the duty paid scrap mentioned in the invoices. The Tribunal established this through recovered invoices, challans, and weigh bridge slips. The appellant's involvement in the fraudulent scheme was confirmed by statements from local scrap dealers who disclosed their role in supplying bazar scrap to the appellant. The Tribunal concluded that the appellant's actions constituted a systematic fraud, and the findings were based on specific details and evidence. Therefore, the Tribunal rejected the appellant's arguments related to the availment of cenvat credit, stating that the appeal lacked merit and was dismissed.

In summary, the High Court of Bombay dismissed the appeal challenging the order of the Customs, Excise & Service Tax Appellate Tribunal. The judgment addressed issues related to the violation of natural justice principles and the wrongful availment of cenvat credit without receiving duty paid scrap. The detailed analysis of each issue highlighted the Tribunal's findings, which concluded that the appellant's arguments did not raise substantial questions of law. The judgment emphasized the importance of specific details, evidence, and compliance with legal requirements in such cases, ultimately leading to the dismissal of the appeal.