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TMI Blog2015 (7) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... s true. In this case, the Revenue has not been able to prove any contrary to the seized documents recovered from the custody of the respondent. Therefore, the same are admissible evidence in favour of the respondent as held by this Tribunal in the case of Rhino Rubber (1994 (4) TMI 196 - CEGAT, MADRAS). In fact no statement of the driver have been recorded to ascertain the truth whether the vehicle in question were involved in transporting the goods or not and no other evidence has been placed on record to ascertain the same. The Revenue has also not come with tangible evidence that the respondent have procured the goods in question from M/s.SOL and other associates. Further, the same investigation conducted in the case of M/s.Narmada Extrusion Ltd. wherein the same set of evidences has been relied on and the Commissioner (Appeals) have set aside the demand of duty and imposition of penalty holding that there are no sufficient ground to confirm the demand .and the said order has been accepted by the Revenue. No appeal has been filed against the said order. On examination of that statement, although the statement retracted by Shri Karni Singh Kothri, this statement is require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s plastic polymers to various manufacturers of plastic products, while selling plastic polymers in cash to other buyers without issuing any invoices, thereby enabling several manufacturers of plastic products to fraudulently availed cenvat credit on the strength of only invoices without receipt of duty paid inputs, conducted searches on 06.12.2007 at the following premises:- 1. Office premises of M/s SOL and its associate companies namely M/s KMPL M/s SMA, M/s SPET M/s LPP. All office premises are situated at Indore; 2. Factory and godown premises of M/s LPP. 3. Residential premises of Shri MukeshSangla (Appellant No. 3), Managing Director of M/s SOL and the authorized signatory or the proprietor of associate companies viz. M/s KMPL, M/s SMA, M/s SPET M/s LPP; 4. Residential premises of Shri Kirti Mahesh chandra Kala, Cashier of M/s SOL aforesaid associate companies; 5. Residential premises of Shri Ravindra Pingle, godown keeper of M/s SOL aforesaid associate companies; 6. Residential premises of Shri Paras Patidar, Marketing manager of M/s SOL aforesaid associate companies. 2.3 During the course of search at above mentioned premises, various incrimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s SOL had been purchasing plastic polymers i.e. HDPE/LDPE/LLDPE granules etc. from M/s Haldia Petochemicals Ltd. Kolkata, M/s DCW Ltd. Shahaupuram and M/s South Asia Petrochemicals Ltd. Haldia. He stated that M/s SOL, registered as a first stage dealer with the Central Excise Department, had been selling these polymers to various industrial users. He further disclosed that the case transactions in above referred handwritten papers denote case receipts and cash payments made by M/s SOL which were not reflected in their official books of accounts. Scrutiny of ledgers on Shri Kala s Laptop in respect of transactions pertaining to the Respondent no. 1 had revealed that the transactions collectively covered the elements viz. (i) payment in case (ii) receipt by cheques (iii) VAT, in his statement dated 18.02.09 of Shri Kirti Kala recorded by the DGCEI Officer, Shri Kala had stated that they supplied invoices of polymers to the Respondent No. 1 without actually supplying the goods as mentioned in these invoices. Accordingly, payment received from the Respondent No. 1 through cheques against such fraudulent invoices was returned in case to them. Further, Statement dated 20.02.09 of Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding cess) was found by the departmental officers to be wrongly availed by the appellant No.1 without receipt of the goods in their factory. This act of the Appellant no.1 with support of appellant No.2 and No.3 appeared to be tantamount as wilful suppression of facts, mis-declaration and contravention of the relevant provisions of Central Excise Act, 1944, Central Excise Rules, 2002 and Cenvat Credit Rules, 2004 with sole intent to evade payment of Central Excise duty. As such, all the three appellants were appeared to render themselves liable for appropriate punishment by the concerned tax department of Govt.of India. 3. A show cause notice was issued to all the respondents and the same was adjudicated by the adjudicating authority confirming demand of duty from the respondent No.1 alongwith interest and imposed penalty on all the respondents. On appeal before the Commissioner (Appeals), filed by the respondents, the Commissioner (Appeals), who appreciated the facts and relevant case law dropped the charge against the main respondent of availing cenvat credit without physically receiving the input and also dropped the penalty on all the respondents. Aggrieved with the said or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigation that the supplier of the goods did not supply the goods to the respondent No.1. From the evidence, it is proved that goods have not been received by the respondent No.1 and the respondent No.1 made entries only in the accounts to show receipt of goods. She further submits that making entry in the statutory records does not prove that teh goods were received in the premises of the respondent no.1 when documents recovered by the department from the premises of Shri Ravindra Pingle and Shri Kirti Kala clearly show that out of 154 invoices issued by M/s.SOL to the respondent No.1, 114 were genuine and remaining invoices were bogus. It is also admitted that Shri Kirti Kala has admitted that slips were showing cash transactions undertaken by them and cash was sent by the respondent to M/s.SOL against the invoices issued in the name of respondent No.1. The Commissioner (Appeals) failed to consider the statement of transporter who has categorically denied of having even transported the goods to the respondents No.1. Shri Mukesh Sangla, respondent No.3 has accepted and confirmed the cash transactions reflected in hand written slips by his employees Shri Kirti Kala, cashier an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciate companies namely M/s KMPL M/s SMA, M/s SPET M/s LPP. All office premises are situated at Indore; 8. Factory and godown premises of M/s LPP. 9. Residential premises of Shri Mukesh Sangla (Appellant No. 3), Managing Director of M/s SOL and the authorized signatory or the proprietor of associate companies viz. M/s KMPL, M/s SMA, M/s SPET M/s LPP; 10. Residential premises of Shri Kirti Mahesh chandra Kala, Cashier of M/s SOL aforesaid associate companies; 11. Residential premises of Shri Ravindra Pingle, godown keeper of M/s SOL aforesaid associate companies; 12. Residential premises of Shri Paras Patidar, Marketing manager of M/s SOL aforesaid associate companies. 7.3 During the course of search at above mentioned premises, various incriminating documents, unaccounted currency valued to ₹ 35 lakhs at residential premises of Shri Mukesh Sangla (Respondent No. 3), three lap-top computers at residential premises of Shri Kirti Maheshchandra Kala were seized by the DGCEI Officers, RU, Indore. At residential premises of Shri Kirti Kala, the departmental officers recovered and seized a file marked A/3 containing several handwritten slips indicating det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andwritten papers denote case receipts and cash payments made by M/s SOL which were not reflected in their official books of accounts. Scrutiny of ledgers on Shri Kala s Laptop in respect of transactions pertaining to the respodnent no. 1 had revealed that the transactions collectively covered the elements viz. (i) payment in case (ii) receipt by cheques (iii) VAT, in his statement dated 18.02.09 of Shri Kirti Kala recorded by the DGCEI Officer, Shri Kala had stated that they supplied invoices of polymers to the respondent No. 1 without actually supplying the goods as mentioned in these invoices. Accordingly, payment received from the respondent No. 1 through cheques against such fraudulent invoices was returned in case to them. Further, Statement dated 20.02.09 of Shri Paras Patidar, revealed that M/s SOL had purchased the subject bogus invoices from M/s Bombay Goods Freight Cargo and M/s Blue Bird Transport Company at the rate of ₹ 100/- per L.R. 7.6 The transactions on Shri Kala s ledgers during the period from 01.10.05 to 05.12.07 had indicated that case payment of ₹ 2,74,20,003/- were made to Respondent No. 1 whereas payment received by M/s SOL by cheques from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availed cenvat credit. The Respondent No. 1 had cleared excisable goods manufactured by them after payment of duty from inadmissible credit, thus such goods were cleared by them without payment of appropriate duty. In such a way, the cenvat credit amounting to ₹ 35,51,805/- was wrongly availed by the Respondent No. 1 without receipt of goods in their factory. This act of the Appellant No. 1 with support of the Respondent No. 2 3 appeared to be tantamount as willful suppression of facts, mis-declaration and contravention of the relevant provisions of Central Excise Act, 1944, Central Excise Rules, 2002 Cenvat Credit Rules, 2004 with sole intent to evade the payment of Central Excise Duty. As such, all the three respondents were appeared to render themselves liable for appropriate punishment by the concerned tax department of Govt. of India. 8. A show cause notice was issued to all the respondents and the same was adjudicated by the adjudicating authority demanding duty from the respondent No.1 alongwith interest and imposed penalty on all the respondents. On appeal before the Commissioner (Appeals), filed by the respondents, the Commissioner (Appeals) without going into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the ledgers in laptop of Kala an depot records. (xv) Statement of some of the owners of vehicles (shown to have used for transportation of goods from M/s SOL associates to Appellant No. 1, in which they denied to have transported any goods from M/s SOL to premises of Respondent No. 1. (xvi) Statement of Proprietor of M/s BGFC and M/s BBTC in which he admitted that he had provided bogus L.R. @ 100/- per L.R. without providing for any truck for transportation to M/s SOL and M/s KMPL. (xvii) Statement of the Respondent No. 2 the Managing Director of the Respondent No. 1 wherein he denied to have ever purchased or received any material from M/s SOL and admitted procurement of only invoices to avail and utilize credit fraudulently. (xviii) Entry of transaction of ₹ 15,00,000/- in the Kala s laptop and handwritten slip said to be pertaining to the cash transactions. (xix) Based on the comparison of invoices, shown in the records of M/s.Parag Pentachem and the godown register of M/s.SOL a certain number of invoices (7 nos.) issued by M/s.DCW were said to have been diverted to Godowns of M/s.SOL and its associates. Besides, 25 nos. invoices shown in the records o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout any evidence of duress or coercion do not deflect from evidentiary value of statements, especially if facts stated therein are corroborated by other evidence. 13. He submits that the appellant authority failed to take into account the hand written slips and entries made in the laptop of Shri Kala showing the receipt of payment in cheques and same being returned in cash to the respondent No.1. He further submits that the owners of the vehicle have also denied to have provided any vehicle for transport of the goods from the premises of M/s.SOL to the respondent No.1. They have also denied the fact that their vehicle has ever been attached to the transporters namely, M/s.Bombay Goods Freight Cargo (BGFC) and M/s.Blue Bird Transport Company (BBTC). Shri Vishal Agarwal representing the main transporters i.e. BGFC and BBTC has confessed that though no trucks were provided by them to m/s.SOL, they have charged ₹ 100 to ShriPatidar for providing the LRs. Shri Paras Patidar, Marketing Manager of M/s.SOL in his statement dated 20.2.2009 has accepted that the purchase of LRs from M/s. BGFC and M/s. BBTC for ₹ 100/- each. It is clear that physically goods were not received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that evidence relied upon are recovered from the persons associated with M/s.SOL. Therefore, as per decision of Apex Court in the case of CBI vs. V.C.Shukla- AIR SC 1406, the demand cannot be sustained on the basis of these records. 16. He further submits that the same investigation was conducted against M/s.Narmada Extrusion Ltd. wherein the same set of evidences has been relied on and the Commissioner (Appeals) have set asdie the demand vide Order-in-Original No.IND/CEX/000/APP/80 81/2013 dt.21.2.2013 and the said order has been accepted by the Revenue. No appeal has been filed against the said order. The Revenue in this case is mainly distinguished their case from M/s.Narmada Extrusion Ltd. only on the ground that in this case there is admission by Shri Karni Singh Kothari that they have never received any goods from M/s.SOL. He further submits that Shri Karni Singh has retracted his statement but his retraction is not acceptable as his earlier statement is to be considered as whole wherein Shri Kothari stated that they are purchasing the goods from the Delhi market without any cover of invoice. He submits that this cannot be relied upon when the goods are available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. It can be seen that when the vehicles numbers are genuine and except the statement of the owners then the statements of the owners have no evidentiary value as the vehicles were driven by the drivers. To support this, he relied upon the decision of the Tribunal in the case of CCE, Ludhiana vs. Parmatma Jatinder Singh Alloys P.Ltd.-2011 (266) ELT 67 (Tri.) in the case of Monarch Metals Pvt.Ltd.-2010 (261) ELT 508 (Tri.-Ahmd.). There is no other documents or record to prove that the allegation of Revenue that the credit was availed without the receipt of the goods by the respondent No.1. There is no evidence that the goods from the factory were diverted elsewhere. He further submits that in case the goods consigned by DCW, the goods were consigned directly by DCW and there is no evidence how the goods have been diverted. There is no dispute that the inputs have been used in the manufacture of final products on which the duty has been paid. It is not the case of the Revenue that during the course of investigation, the officers found any other goods in place of goods to have been used in the manufacture of final products. There is no evidence on record that whether the goods ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection give them in a sufficient degree a probability of trustworthiness (Wigmore on evidence ? 1546). Since, however, an element of self interest and partisanship of the entrant to make a person behind whose back and without whose knowledge the entry is made liable cannot be rules out the additional safeguard of insistence upon other independent evidence to fasten him with such liability, has been provided for in Section 34 by incorporating the words such statements shall not alone be sufficient to charge any person with liability . 39. A conspectus of the above decisions makes it evident that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness, fix a liability upon a person. Keeping in view the above principles, even if we proceed on the assumption that the entries made in MR 71/91 are correct and the entries in the bother books and loose sheets (which we have already found to be not admissible in evidence under Section 34) are have already found to be not admissible in evidence under Section 34) are admissible under Section 9 of the Act to support an inference about the formers correctness still those entries w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra. The citations placed would directly apply to the facts of this case. Hence, following the ratio of the cited judgments, the assessee s appeal is allowed. 23. In the case of Rhino Rubbers Pvt.Ltd. (supra) again this Tribunal has held observed as under: Goods not sufficient to prove clandestine manufacture and removal to have been purchased by one Mr. Augustin on behalf of the manufacturer - Such person not traced by the authorities nor his statement recorded - Manufacturer disowning the purchase of the raw material from the third party- Third party s records also showing names of the other purchasers but some of such purchasers of carbon black. HELD: It is not safe to rely only on the third party s records evidence when no direct links of the transaction established Other parameters like electricity consumption etc. should have been considered before demanding duty on the alleged clandestine manufacturer and removal of goods Order demanding duty and imposing penalty set aside and case remanded for de novo adjudication. 24. Therefore, third party evidence by way of documents/laptop printout seized recovered from the custody of ShriKirti Kala are not admissible pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.Ltd.. Another evidence relied upon by the Revenue is the statement of the transporter. Shri Vishal Agarwal, proprietor M/s. BGFC and authorised signatory of M/s. BBTC has stated that they have issued LRs to M/s.SOL by charging ₹ 100 for each bilty and on the statement of 3 vehicle owners and out 32, who refused to have transported the goods. From the statement of Shri Vishal Agarwal, it is clear that he has issued bilty only when talked to the driver of vehicle for which he charged ₹ 100/-. Therefore, the statement has been misinterpreted by the investigating authority to allege that the transporter of BGFC and BBTC. In fact no statement of the driver have been recorded to ascertain the truth whether the vehicle in question were involved in transporting the goods or not and no other evidence has been placed on record to ascertain the same. The Revenue has also not come with tangible evidence that the respondent have procured the goods in question from M/s.SOL and other associates. Further, the same investigation conducted in the case of M/s.Narmada Extrusion Ltd. wherein the same set of evidences has been relied on and the Commissioner (Appeals) have set aside the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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