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TMI Blog2015 (1) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... e recovered from the appellant s factory during the course of search. No enquiries were conducted from the concerned bank so as to corroborate the statements of the said traders. There is not sufficient evidence to arrive at a finding that the appellant had availed CENVAT credit on the basis of bogus gate passes without bringing raw-materials into their factory, we also note that the Revenue has not shown any other alternate source of procurement of raw-materials. Admittedly, the appellant had manufactured their final product, which has been cleared on payment of duty. In the absence of any raw-material, it is not only difficult but virtually impossible and impractical for the appellant to manufacture their final product. There is neither any allegation much less any evidence on record to show that the appellant had procured the raw-materials from other alternate source. - The adjudicating authority has also referred to the fact that some of the vehicles were found to be non-transport vehicles. He has given a list of vehicle numbers in his impugned order. However, we have been shown that all the 23 vehicle numbers found in the said list were never mentioned in the gate passes un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 2. It is on record that the search of the appellants factory was conducted on the basis of the information received from Income Tax Department. However, the Department further investigated the matter and recorded the statements of various traders. As it was found that the appellants were procuring the raw-materials from M/s. Steel and Scrap, M/s. Ambassy Steel and M/s. KS Steels, the statements of the concerned persons of the said input suppliers were recorded. 3. As per the statement of Shri Sanjay Maheswari, Proprietor of M/s. Steel Scrap, recorded on 27.03.1996, Shri Anil Khandelwal, who was its Manager, was looking after the entire work. He stated that Shri Anil Khandelwal used to take a blank cheque duly signed by him for which he was paid ₹ 500/-. He was purchasing gate passes from various factories and was endorsing the same in the name of the appellants, without actual supply of the raw-materials. Statement of Shri Anil Khandelwal was recorded on 29.03.1996, therein he deposed that he was earlier working with M/s. ____doss Steel and used to supply rolling and scrap materials/ scrap from Bhavnagar, (Gujarat) and supplying the same in the local market. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r extending the appellant the opportunity to cross-examine the input suppliers. 8. The present impugned order stands passed by the commissioner in de novo proceedings. 9. During the course of de novo adjudication, the cross-examination of five persons was undertaken. Shri Nathulal Jain and Shri Madanlal were the transporters, who during the course of cross-examination accepted the having supplied the goods to the appellant. Shri Kishan Gopal Khandelwal stated that as it was his son Shri Anil Khandelwal, who used to look after the business, he cannot comment upon the same. Two more persons Shri Anil Mansukhani and Shri Kavindra Gandhi were also offered for cross-examination, but as they were not the persons concerned with the case, their cross-examination was not conducted. It is not known as to why the said two unconnected persons were offered for cross-examination. 10. The appellants grievance is that even though the matter was remanded by the Tribunal with specific directions to offer the cross-examination of the input suppliers, the commissioner has failed to do so. Out of five persons offered for cross-examination, two were unconnected, two were transporters and one p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation. Such directions of the Tribunal were binding on the commissioner. We agree with the ld. Advocate that in as much as it was the Revenue, who have relied upon the said statements, it was for them to produce the deponents for cross-examination. No responsibility can be fixed upon the appellants to ensure the presence of the input suppliers for the purpose of cross-examination. We also find that the observations and findings given by the adjudicating authority regarding the cross-examination of the input suppliers are self-contradictory and reflect upon the incorrect factual position. On one hand, in para 20 and 22, he is admitting that the said input suppliers did not appear for cross-examination, on the other hand, he is observing that Shri Anil Khandelwal and Shri Himatlal appeared for cross-examination. In as much as the commissioner has not carried out the directions of the Tribunal, we find that the impugned order to be bad in law. 13. Apart from that, we find that the present impugned order is replica of the earlier order passed by the commissioner, which already stands set aside by the Tribunal. 14. Though the cross-examination of traders were not conducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o anybody to open any account and never deposited any money in the said account. They further wrote in the said letter that Assessing Officer, Income Tax was pressurising the bank to give evidence against the appellant and to say that they have given introduction to 5 to 6 accounts. The said communication by the officers of the bank is important in as much as the present case of the Revenue is primarily based upon the evidences collected by the Income Tax authorities. The said letters have been taken note of by the ITAT while deciding the Revenues appeal against the order of the first appellate authority under the income tax laws. The fact that the appellants appeal was allowed by the Commissioner (Appeals), which order was further upheld by the ITAT holding the transactions between the parties to be genuine, is an important fact, which cannot be ignored. The observations of the commissioner that the said proceedings before the Income Tax authorities would not be of any binding effect in as much as the proceedings before him were ______recovery of fraudulantly availed MODVAT credit cannot be appreciated in as much as the entire case of the Revenue was made out on the basis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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