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TMI Blog2016 (12) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... t M/s. BDCPL has procured raw material from any other source other than KMC/ AAL, and used the same to manufacture finished products, the allegation that KMC/AAL did not supply any goods but only issued invoices is not tenable. It is also to be noted that the Commissioner(Appeals) in the case of M/s. Khaitan Electrical Ltd., and KMC vide Order-in-Appeal No. 99/2009 dated 04.12.2009 and vide another Order-in-Appeal No. 26,27 and 28/2010 dated 26.02.2010 has set aside the demand interest and penalty raised against M/s. Prism Airtech and in the same order also set aside the penalty imposed against KMC who was a co-noticee - it was found that the overall evidences were similar in all the appeals. I am of the view, that department has fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se invoices to M/s. Bhargavi Die-Cast Pvt. Ltd., without actual supply of material and indulged in fraudulent availment of credit. Appeal E/239/2010 is filed by department against impugned order passed where in the Commissioner (Appeals) in the appeal filed by KMC reduced the penalty from ₹ 27,87,019/- to ₹ 15,00,000/-. 4. The DGCEI, Hyderabad on receiving information that M/s. BDCPL (as well as other manufacturers) is indulging in fraudulent availment of credit on invoices issued by registered dealer KMC conducted investigations. The allegation of availing fraudulent CENVAT credit is based upon the evidence inter alia, from the private records recovered from residential premises of Shri. Prabhakar who was employee of KMC. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AR, Shri. Arun Kumar appearing on behalf of the Department reiterated the findings in the impugned order. He submitted that the department filed appeal No. E/293/2011 against the order passed by Commissioner(Appeals) by which the penalty imposed was reduced from ₹ 27,87,019/- to ₹ 15,00,000/-. He submitted that the entries in the private records recovered from the residence of Shri. Prabhakar showed the name Bhargavi, which indicates that invoices were issued to M/s. BDCPL. Perusal of invoices issued by KMC to M/s. BDCPL revealed that KMC issued invoices on the basis of Central Excise invoices issued by AAL and BALCO and in some cases by Madras Aluminum Company (MALCO). During search, several documents indicated issuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued, the department has to prove how M/s. BDCPL could manufacture finished products on which they have paid excise duty during the relevant period. On conduct of inspection the stocks and statutory register of M/s. BDCPL did not show any discrepancy. In the absence of any evidence that M/s. BDCPL has procured raw material from any other source other than KMC/ AAL, and used the same to manufacture finished products, the allegation that KMC/AAL did not supply any goods but only issued invoices is not tenable. Again, the allegation against KMC is that they sold the goods in local market without bills. The evidence of any such buyers and accounts of such purchase by buyers are not put in as evidence. The chain of evidence put forward by depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by reputed manufacturers and clandestine source of procurement from such manufacturers is not possible except that the source can be by way of diversion from other customers who do not need such sheets. But, this probability is also ruled out, as there is no incentive for doing all this exercise either at the appellants end or at the dealers end as in that case, the sheets invoiced would need to be diverted to some other manufacturer or customer on kacha bills. The dealer does not gain anything in diversion and substitution and the manufacturer also does not gain anything. Therefore, the allegation of diversion or non use of sheets, in my view, is not sustained for lack of evidence and the corresponding demand, therefore is liable to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot the case. Hence, I find adequate force in the contention of the appellants in as much as it is not the case of investigation that there was any shortage of physical stocks vis-a-vis the recorded book stock at the time of search. As regards, the reliance placed on various statements by the investigation to sustain the charges, I am to observe that mere statements are not enough to confirm the allegations as held by various judicial fora in several cases. In the absence of corroborative evidence, mere reliance on statements is of no help to the department s case 12. The overall evidence being similar, after perusal of records, I am of the view, that department has failed to establish that appellants are guilty of indulging in activiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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