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TMI Blog2017 (11) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturers, either in tankers or in drums/carboys and are stored in evaporation-free storage tank and subsequently such OCS is mixed with prescribed quantities of methanol and various additives and stabilizers, agitated mechanically, which results in production of thinner. The thinners so manufactured are subsequently cleared on payment of duty to various customers by transportation through tankers or in drums/carboys. 2. On 24 September, 2002, the officers of the Department visited the appellant's premises and conducted a search. During the search/inspection the officers resumed various documents, including certain invoices pertaining to RVS Petrochemicals Private Ltd, Bahadurgarh (RVS for short) and Amkap Marketing Private Ltd. Raebareli (Amkap for short), who were the suppliers of OCS to the appellant. After investigation, show cause notice dated 02 August, 2005 was issued alleging non-receipt of raw material, namely OCS, from RVS and Amkap for the period from September, 2001 to October, 2002 and thereby demanding recovery of Cenvat Credit to the tune of Rs. 4,25,90,804/- as detailed in Annexure-A to the SCN, as per the provisions of Cenvat Credit Rules, 2001/2002. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urges that the ground of the Department for demanding recovery of Cenvat Credit from the appellant is that the appellant have not received the raw material, namely OCS from the suppliers, namely RVS and Amkap. Hence, they are not eligible to avail the credit of the same. In this context, the Department had conducted the investigation at the end of RVS and Amkap and recovered 4 parallel invoices from RVS, wherein it could be seen that out of the 824 transactions between the period from September, 2001 to September 2002, the Department found parallel set of invoices on four occasions only and that too in the hands of RVS. But the Department have chosen to deny the Cenvat Credit to the appellant for all 824 transactions/invoices. It is further urged that assuming (not admitting) that there had been instances of parallel invoices at the hands of RVS, firstly it shall not have any impact at the appellants hands as they have genuinely purchased the inputs from RVS on payment of appropriate duty and have rightly availed the credit. Further, they have made payment for such purchases through banking channel. If at all there is any discrepancy in the hands of RVS, the duty can only be deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely thinner and cleared the same on payment of duty. Further both the transaction of purchase of inputs and sale of output is through banking channels. Thus, for a minor discrepancy in about six GRs out of total 446 transactions/invoices of OCS received, the adverse inference drawn by Revenue is erroneous and fit to be set aside. Further, from a perusal of the depositions of Shri Aman Deep Singh, proprietor of M/s Deep Roadlines and Shri Rajendra Kumar Gupta, proprietor M/s Balram Transport Company reveals that all the transactions with respect to transport handled by them are genuine. In view of the evidences and the depositions in favour of the appellant, the learned Commissioner have erred in drawing adverse inference by holding that no transportation whatsoever of OCS from the supplier to the appellant have taken place. So far the allegation of the Department that some of the vehicles used for transportation of OCS from the suppliers to the appellant are open body trucks as well as old trucks, the learned counsel urges that both raw material - OCS as well as finished goods - thinners are capable of being transported both in tankers as well as in drums/carboys. Whenever the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been no manufactured, amounts to reversal of duty. The same have been confirmed by Hon'ble Bombay High Court reported at 2013 (294) ELT 203. The learned counsel also relies on the following rulings in support of their contentions: - -Aum Aluminum Private Ltd v/s CCE - 2014 (311) ELT 354 (Tri. Ahmd.), -Commissioner v/s Dhanlaxmi Tubes and Metal Industries 2012 (282) ELT 206 (Gujarat), -Monarch Metals Private Ltd v/s CCE - 2010 (261) ELT 508 (Tri. Ahmd.), Commissioner of Central Excise, Chandigarh v/s Neepaz Steels Ltd - 2008 (230) ELT 218 (P & H), -Adhunik Alloys Ltd. v/s CCE - 2016 (344) ELT 426 (Tri. Chan.) 8. The learned counsel for Revenue have relied on the impugned order. He further draws our attention to the findings of the learned Commissioner, wherein it have been observed that on going through the statements of various persons as per the show cause notice, the case is not made out on the basis of a statement alone. There are other material evidence on record which to go to establish that only duty paid documents were supplied and the goods were not actually supplied. This is evident from statement of Shri Kailash Chandra Agarwal, accountant of appellant, wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty on final products. The learned Commissioner was required to verify as to whether the payment for the purchase of inputs and payment received for sale of final products, claimed to have been made through banking channel is correct or not. But the learned Commissioner in spite of observing that there are proper transactions through the banking channel, both for purchase of inputs and sale of final products have observed that it is suggestive that some transactions might have taken place. Thus, in so many words, the learned Commissioner have accepted the genuineness of the transaction, but have erred in observing that such transactions cannot be considered as certificate of genuineness. We also find that the duty paid by the appellants on the clearance of the finished goods, particularly thinner, have been accepted by the Revenue. We also find that in addition to paying duty through Cenvat account, appellant have also paid part of the duty payable through PLA. The learned Commissioner have erred in observing that such payment through PLA is about only 1% of the sales value or turnover. We also find that there is no allegation in the show cause notice that the input - OCS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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