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TMI Blog2011 (5) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that Shri Vijay Garg in his statement has specifically clarified, in answer to questions put to him that plates obtained by ship breaking can be used for melting purposes. He has further clarified that all the plates are of not good quality and it is only where the plates are of lower value that the same are used for melting purposes, whereas the plates supplied to re-rolling mills are of higher value. In the absence of any alternative source of procurement of raw materials, no reason to upset the findings of the adjudicating authority that presumptions cannot be made the base for making a charge of diversion of huge quantity of raw material for continuous period of four years and substituting the same with market scrap. After all M/s. Jaidev Alloys Pvt. Limited were paying duty on their final products and Revenue has not been able to show as to how such huge quantity of final quantity of final product were being manufactured by them, if the scrap shown to have been received by them, was not actually received and there was no other alternative source of procurement - Decided in favour of the assessee - E/834 to 840 of 2007 - A/1018-1024/2011-WZB/AHD - Dated:- 16-6-2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Bansal Brothers dated 12.11.2003 in the name of M/s. Jaidev Alloys Pvt. Limited was found from the drawer of the table of authorised representative of the said noticee. It was also seen that MS scrap, which was one of the raw materials of the said unit, was not accounted for in the record. The same was also put under seizure. Statement of Shri Anil Kumar J. Tripathi, authorised representative of M/s. Sanjay Ispat Pvt. Limited was recorded wherein he stated that they were procuring only ship breaking scraps for manufacture of 6mm and 8mm CTD Bars; that invoices for the said ship breaking scrap was being issued by the suppliers in the name of M/s. Jaidev Alloys Pvt. Limited, who were availing the benefit of cenvat credit in respect of the same; that the finished goods manufactured by them out of the unaccounted raw materials was sold to their customers clandestinely. He also gave the details of such clearances. 4. Searches were also conducted at the premises of M/s. Bansal Brothers and M/s. Gujarat Impex Labs Pvt. Limited, suppliers of the raw material. Statement of partner revealed that the said firms were engaged in the business of procuring and breaking of old ships, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he noticees proposing confirmation of demand, confiscation of the seized goods and imposition of penalties upon them. However, it is seen that the said show cause notice was issued to the respondents were vacated by the original adjudicating authority vide his order dated 25.02.2005. The same are not the subject matter of the present appeals. The reference to the above facts stands made, inasmuch as the Revenue s case against the respondents initiated on the basis of such visits and Commissioner in his present impugned order has made reference to the observations and findings of the Assistant Commissioner made in the earlier order in original. 7. As a result of the above detection of shortages and excesses, Revenue carried the matter further by way of scrutinising the various records seized from the premises of various respondents and by recording the statements of various persons. Based upon such scrutiny and the statements, a show cause notice was issued to the respondents alleging that the raw materials shown to have been received by M/s. Jaidev Alloys Pvt. Limited was not in fact utilised in the manufacture of their final product and the modvat credit of Rs. 95,38,034/-, av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing against the respondents and was being relied upon by the Revenue in show cause notice as a corroborative factor. 10. The notices have further relied upon the fact that the truck was found unloading scrap at the premises of M/s. Sanjay Ispat Pvt. Limited whereas, the invoice was found in the drawer of the said assessee showing the consignment in the name of M/s. Jaidev Alloys Pvt. Limited. While dealing with the said basis, the Commissioner has observed that the shortage of the raw material found in the premises of the said assessee as also in the premises of M/s. Gujarat Steels Pvt. Limited were the subject matter of the earlier show cause notice, which already stands dropped by the Assistant Commissioner by observing that there is no evidence on record to show that the raw materials which was found short was removed clandestinely and as such the same must have been consumed in the factory. The Commissioner has observed that in view of the findings of the Assistant Commissioner in respect of the earlier show cause notice, vide which the allegation of shortages/ excesses of raw material could not be substantiated, no inference out of the same can be drawn to charge and confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e retracted statements must be corroborated by some evidences on record so as to reflect upon the correctness of the same, especially when the same stands retracted by the deponents. In the present case, there is virtually no corroboration by way of independent and positive evidence on record. It is also noted that the said statements are in the nature of statements of co-noticees, as far as M/s. Jaidev Alloys Pvt. Limited (main noticee) is concerned. Shri Vikas Arya, Director of M/s. Jaidev Alloys Pvt. Limited as also two other units M/s. Gujarat Steels Pvt. Limited and M/s. Sanjay Ispat Pvt. Limited has given an exculpatory statement. As such, the statement of the co-noticees are required to be corroborated in material particulars for making them the evidences against the three units of Shri Vikas Arya, especially when the statement of Shri Vikas Arya nowhere admits the modus-operandi, alleged by the Revenue. 13. We further note that the adjudicating authority has referred to the allegations made in the show cause notice, which are to the effect that M/s. Jaidev Alloys Pvt. Limited has availed the cenvat credit in respect of the ship breaking plates but have diverted the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s statement has specifically clarified, in answer to questions put to him that plates obtained by ship breaking can be used for melting purposes. He has further clarified that all the plates are of not good quality and it is only where the plates are of lower value that the same are used for melting purposes, whereas the plates supplied to re-rolling mills are of higher value. In the absence of any alternative source of procurement of raw materials, we find no reason to upset the above findings of the adjudicating authority. After all M/s. Jaidev Alloys Pvt. Limited were paying duty on their final products and Revenue has not been able to show as to how such huge quantity of final quantity of final product were being manufactured by them, if the scrap shown to have been received by them, was not actually received and there was no other alternative source of procurement. 14. We also find that Commissioner is justified in placing reliance on the earlier order in original dated 06.10.2005, passed by the Assistant Commissioner vide which, he has dropped the allegations of clandestine removal of short found inputs and excess found final products. Similarly, the observations of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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