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TMI Blog2017 (5) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... dit to the tune of Rs. 61,00,978/- alleged to have been irregularly availed along with interest thereon and imposition of equal penalty under Rule 57I(4) of Central Excise Rules, 1944 / Section 11AC of Central Excise Act, 1944 read with Rule 57AH(ii) of Central Excise Rules, 1944. Five Annexures were issued along with the show cause notice as follows:- AnnexureA:- Details of engines and alternators mentioned in the input invoices received in the unit from 1.4.99 to 19.5.2011. Annexure-B:- Details of engines and alternators cleared from the unit from 1.4.99 to 19.5.2001 Annexure-C:- Details of Engines and alternators found in stock as on 19.5.2001; Annexure-D:- Details of the engines not received in the factory and on which MODVAT/CENVAT credit has been availed of irregularly; Annexure-E:- Details of the alternators not received in the factory and on which MODVAT/CENVAT credit has been availed of irregularly. 2. In adjudication, the Commissioner of Central Excise vide the impugned order dated 28.10.2005, based on the evidences and submissions put forth by the appellant reduced the duty liability to Rs. 41,72,987/- along with interest thereon, and imposed penalty equivalen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts the adjudication. He contends that the quantum of irregular CENVAT credit allegedly availed by the appellant had been worked out in the Annexures to the show cause notice based on the appellant's own records. He also contended that the appellant's reply to the show cause notice and the evidences submitted by them during adjudication have been carefully considered and only after such exercise, the adjudicating authority has reduced the duty liability from Rs. 61,00,978/- to Rs. 41,72,987/-, along with interest thereon and penalty. 5.2 Learned AR further argues that it is for the appellant to show how the annexures are incorrect and onus is also on the appellant to prove otherwise. For these reasons, learned AR submits that there is no merit in the appeal filed by the appellant. 6. We have heard both sides and perused the records. 7.1 The entire controversy has emanated on the apparent discrepancies detected by the investigating officers during their visit to the appellants factory on 5.12.2000, between the number of engines on which CENVAT credit had been availed by the unit and the actual physical stock of engines available in the factory. Based on such a finding, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has stated that the Annexures F, G & K have been reconciled and had agreed that out of the total demand, an amount of about Rs. 12 lakhs has been reconciled (i.e. the demand is incorrect to this extent). As far as the other entries are concerned, he has stated that it is for the assessee to reconcile whereas the assessee had taken a stand that it is for the department to rework the demand. The I.O. during the cross-examination on 29.7.2003 had justified the non-consideration of 61 numbers of engines and 35 numbers of alternators lying in the unit (as per S. No. 43 & 44 of Annexure A of the mahazar and S. No. 97 & 98 of Ann. B of the mahazar) while drawing the Show Cause Notice by stating that when the mahazar was drawn on 19.5.2001, he was told that the engines and alternators lying in the unit without number plates were very old. In this regard, I find that with reference to the entries in Sl. No.44 of Annexure A and Sl. Nos.97 & 98 of Annexure B to the mahazar, it has been clearly mentioned that the engines and alternators were without any number plates. The mahazar has been drawn in the presence of Shri N.Purushothaman, Sr. Accounts Officer and Authorized Signatory of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the investigating officer to verify the correctness of the claim of the reconciliation statement submitted by the appellants, through Annexures F, G and K. 7.10 It is further evident that the adjudicating authority has acted on the findings and recommendation of the said investigating officer without any self-application of mind on the issue at stake. We are also distressed to note that neither the note submitted by the investigating officer nor for that matter, the report made by the preventive unit were made available to the assessee. Evidently, the adjudicating authority has relied upon on whatever reports that were given to him. In a way, what the adjudicating authority has done is a delegating and "outsourcing" of his quasi-judicial powers to the investigating officer which is not the conduct expected in the delivery of justice. 8. From the above discussions, we find that the entire basis of the show cause notice is in question and the department has not proved the basis for the Annexures and the allegations raised in the show cause notice. The entire proceedings are obviously hobbled ab initio with incoherence and errors. The appellant then, is being asked to defend the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciples of natural justice and a requirement that should be complied with by the authorities to satisfy the principles of natural justice. The Court inter-alia held as follows:- "10. One more ground, on which, the impugned show cause notices are to be held as bad in law is that the notices are bereft of particulars and in the sub-column, it is stated as proposal received. Obviously, this proposal is from the officials of the Enforcement Wing. If such is the case, then the petitioner is entitled to know as to why the officials of the Enforcement Wing sent a proposal, though the petitioner had given an elaborate reply to the officials of the Enforcement Wing on 8.2.2016 as undertaken by them in their statement recorded by the officials of the Enforcement Wing on 31.12.2015." 9.4 In the case of Everest Educational Charitable Trust Vs. CST, Chennai - 2014 (36) STR 79 (Tri.-Chen.), the Tribunal held that a lack of specific proposal in the SCN is fatal to the proceedings. The relevant portion is quoted below:- 7. We have considered the submissions by both sides. We find that there is a specific finding in the initial adjudication order to the effect that training courses conductin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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