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TMI Blog2017 (12) TMI 1430X X X X Extracts X X X X X X X X Extracts X X X X ..... i Mohd. Altaf, Assistant Commissioner (AR), for Respondent ORDER Per : Anil G. Shakkarwar The above stated 21 appeals are arising out of two Orders-in-Original and the issues involved are same and the appellants involved are also common. Therefore, these are taken together for decision. All the above sated appeals filed in the Year 2010 are arising out of Order-in-Original No. 83-105/Commr./Meerut-II/2010 dated 29/01/2010. Secondly, the remaining appeals are arising out of Order-in-Original No. 37/Commr./Meerut-II/2011 dated 29/03/2011. Through OIO dated 29/01/2010 Show Cause Notice dated 28/11/2008 which was issued for covering a period from November, 2003 to 15/07/2008 was adjudicated. The OIO dated 29/03/2011 has adjudicated Show Cause Notice dated 07/08//2009 which was issued covering a period from 16/07/2008 to 30/06/2009. 2. Through the said Show Cause Notice dated 28/11/2008 M/s Arora Aromatics were called upon to show cause as to why Cenvat credit amounting to Rs. 15,87,77,553/- availed by them during the period from November, 2003 to 15/07/2008 on the strength of invoices issued by M/s Ruchi Infotech System, Jammu should not be demanded and recovered from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay Ambey Corporation, Jammu, M/s Rapti Commission Agency, Lucknow, M/s Vishal Trading Co., Lucknow, M/s Bansal Trading Company, Hathikhana, Jawahar Road, Sambhal & M/s Meenu Enterprises, Kot East, Sambhal. Through the said Show Cause Notice dated 07/08/2009 M/s Arora Aromatics were called upon to show cause as to why Cenvat credit amounting to Rs. 1,03,06,922/- availed by them during the period from 16/07/2008 to 30/06/2009 on the strength of invoices issued by M/s Ruchi Infotech System, Jammu & M/s Amarnath Industries, Kathua should not be demanded & recovered from them under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Sub-section (1) of Section 11A of the Central Excise Act, 1944. Further, there was a proposal to impose penalty under Rule 26 of the Central Excise Rules, 2002 on Shri Pankaj Somani, General Manager of M/s Arora Aromatics, M/s Ruchi Infotech System, Jammu, Shri Suresh Chandra Arora, Proprietor of M/s Ruchi Infotech System, Jammu, M/s Amarnath Industries, Kathua & Shri Vijay Kumar Agarwal, Partner of M/s Amarnath Industries, Kathua. 3. The brief facts of the case are that M/s Arora Aromatics were engaged in the manufacture of Ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icals, Tinsukia did not appear to have manufactured the goods, in respect of which invoices were available of having said goods procured by M/s Arora Aromatics and therefore the goods claimed to have been manufactured by M/s Ruchi Infotech System, Jammu & M/s National Chemicals, Tinsukia did not appear to have been manufactured in their factories and therefore, availment of Cenvat credit on the basis of invoices issued by them was fraudulent and therefore, M/s Arora Aromatics were not eligible to avail the said Cenvat credit. The main allegation was that the suppliers of inputs to M/s Arora Aromatics neither procured raw-materials nor had capacity to manufacture and nor manufactured the goods which were said to have been procured by M/s Arora Aromatics and that the said goods were not transported from M/s Ruchi Infotech System, Jammu and were not received by M/s Arora Aromatics and therefore, Cenvat credit availed on the strength of such invoices was not admissible. With similar allegations the said Show Cause Notice dated 07/08/2009 was also issued for the subsequent period. 4. The said two Show Cause Notices dated 28/11/2008 & 07/08/2009 were adjudicated through above stated imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no investigations were conducted in respect of other suppliers of raw-materials still a demand of more than Rs. 9 Crore was raised through the said Show Cause Notice without carrying on any investigation and the same was not sustainable. They also submitted before the Original Authority that the goods were exported on payment of duty and proof of export was submitted to the Competent Authority and then the rebate more than of Rs. 6.71 Crore was sanctioned to them and therefore, the demand in respect of recovery of the same was not sustainable. The findings by the Original Authority in the said Order-in-Original dated 29/01/2010 are as follows:- (A) The Original Authority has stated that he has gone through the said Order-in-Original dated 31/03/2008 passed by Commissioner of Central Excise, Jammu in respect of M/s Ruchi Infotech System, Jammu and nowhere found any remark of said Commissioner having seen the manufacture of Menthol Flakes & DMO by M/s Ruchi Infotech System, Jammu and also did not see melting tanks himself in the premises of the factory. Therefore, finding by Commissioner, Jammu recording the manufacturing process carried out by M/s Ruchi Infotech System, Jammu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with proviso to Section 11A & Section 11AB of the Central Excise Act, 1944. (b) I disallow the Cenvat Credit amounting to Rs. 24,07,392/- (Rs.23,82,336/- BED + Rs. 25,056/- Ed. Cess) [Rupees Twenty Four Seven Thousand Three Hundred & Ninety Two only) fraudulently availed by the M/s Arora Aromatics during the period from November, 2003 to January, 2005, on the strength of bogus invoices issued by M/s National Chemicals, Tinsukia, Assam and I demand the same from M/s Arora Aromatics alongwith interest under Rule 12 of the erstwhile Cenvat Credit Rules 2002/Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 11A & 11AB of the Central Excise Act, 1944. (c) I disallow the Cenvat Credit amounting to Rs. 9,10,10,103/- (Rs.8,90,84,505/- BED + Rs. 15,41,192/- Ed. Cess + Rs. 3,84,406/- H. Ed. Cess) fraudulently availed by M/s Arora Aromatics during the period from 16/02/2006 to 15/07/2008 on the strength of bogus invoices issued by units namely M/s Abhay Chemicals, Jammu, M/s Amarnath Industries, Kathua, M/s Rajdhani Aromatics, samba, M/s Gaurav-Agrochem, Kathua, M/s G. L. Traders, Jammu, M/s V. S. Industries, Jammu, M/s Narbada Industries, Jammu, M/s Bhagwati Enterpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ath Industries, Kathua, Rs.(50,00,000/- (Rupees Fifty Lakhs only) upon M/s Rajdhani Aromatics, Samba, Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) upon M/s Gaurav-Agrochem, Kathua, Rs. 10,00,000/- (Rupees Ten Lakhs only) upon M/s G. L. Traders, Jammu, Rs. 6,00,000/- (Rupees Six Lakhs only) upon M/s V. S. Industries, Jammu, Rs. 10,00,000/- (Rupees Ten Lakhs only) upon M/s Narbada Industries, Jammu, Rs. 15,00,000/- (Rupees Fifteen Lakhs only) upon M/s Bhagwati Enterprises, Kathua, Rs. 5,00,000/- (Rupees Five Lakhs only) upon M/s Essar Overseas, Kathua, Rs. 10,00,000/- (Rupees Ten Lakhs only) upon M/s Khazana Corporation, Jammu, Rs. 5,00,000/- (Rupees Five Lakhs only) upon M/s V. K. Sales, Kathua & Rs. 10,00,000/- (Rupees Ten Lakhs only) upon M/s Jay Ambey Corporation, Jammu under Rule 26 of the Central Excise Rules, 2002. (6) I impose penalty of Rs. 25,00,000/- (Rupees twenty Five Lakhs only) upon M/s Rapti Commission Agency under Rule 26 of the Central Excise Rules, 2002. (7) I impose penalty of Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) upon M/s Vishal Trading Co., Lucknow under Rule 26 of the Central Excise Rules, 2002. (8) I impose penalty of Rs. 25,00,000/- (Rupees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s admitted and allowed to be considered through the said dated 01/10/2012 are as follows:- "Copy of the Letter bearing C. No. IV-CE(9)CP/45/06/Pt-III dated 06/05/2010 of the Commissioner of Central Excise, Noida addressed to the Chief Commissioner, Meerut with regard enquiry in to running of the six Jammu based units who supplied excisable goods to M/s Bhagat Aromatics, Noida." 8. Heard the ld. Counsel Mr. B. L. Narasimhan, for the appellants on behalf of the M/s Arora Amormatics, who has made following submissions as follows:- (a) The main demand pertains to denial of Cenvat credit on account of inputs allegedly not received from M/s. Ruchi Infotech System, Jammu (involving Cenvat Credit of Rs. 15,87,77,553/-) which according to the Original Authority, has not manufactured the inputs and thus not supplied to the main Appellant herein. The order of the Original Authority is based on the allegations and findings as under:- (i) It has been contended that M/s. Ruchi Infotech System, Jammu do not have sufficient plant and machinery to manufacture the inputs which are claimed to have been supplied to M/s. Arora Aromatics, Sambhal who have availed this Cenvat Credit therein. Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trict Industry Centre. Appellants submits that the number of evidences, inter-alia, including the PBC checks were also there. Further, in the order of the Commissioner of Central Excise, Jammu dated 31st March, 2008, it has been held that the process adopted by M/s. Ruchi Infotech System amounts to manufacture which is also categorically mentions that menthol flakes were melted and stored in drums, and thus proves the existence of melting tanks. The Original Authority has chosen not to agree to this evidence and has doubted the order of the Commissioner of Central Excise, Jammu as well as PBC checks conducted by the officers of Central Excise, Jammu. The Original Authority in subsequent findings has also disallowed the cross-examination of those officers who actually conducted the PBC checks. (b) In view of the above, the finding that there was no machinery available in the factory of M/s. Ruchi Infotech System, is not sustainable. Further, since the assessments have been completed by the jurisdictional Commissioner of Central Excise, Jammu showing that the factory of Ruchi Infotech System is existing and working, inter alia, having melting tanks in the factory cannot be challeng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Public Information officer replied to the application dated 10.02.2011 vide its letter dated 17.02.2011 along with the list providing for details of Consignor name, Consignee name, Entry date, Bill No., Bill date, Bill amount and Vehicle Number from 30.05.2005 to 30.01.2010. All the details supplied by the Excise Taxation Commissioner tallies with the details available with the Appellant Said details were submitted to this Bench as additional evidence which was allowed to be admitted. This proves transportation and finding to the contrary is not sustainable. (e) At internal page 298 of impugned order, a reference has been given to the enquires conducted from National Chemicals, Tinsukhia (Cenavt involved Rs. 24,07,392/-). The Appellants have been claiming that the last material purchased from them was vide invoice dated 27.01.2005 and their factory has been found to be closed on 9.11.2005. The Original Authority has come to the conclusion that no material has been supplied to them. Since the material has passed through number of States to U.P. and all the documents at the check post enroute the factory of the Appellants have been placed before the Original Authority. The Ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signments and drew samples of the inward consignment simply on the ground that there is no directions to do so. The Appellants submit if there was no direction, it was incumbent upon the Original Authority to ask the officers as to how they have received the intimations, verified the inward materials and drew samples. Having lost the opportunity to do so, the Original Authority simply cannot brush aside the verification of the inward material by none other than his own officers. (h) In addition to the denial of Cenvat Credit on the receipt of the materials from Jammu, the Original Authority has also demanded back sanctioned rebate to the of Rs. 6,71,18,555/- which was granted by the Department after verification of invoices in terms of Rules 18 of the Central Excise Rules, 2002. The Appellants submitted to the Original Authority that the demand to the extent of the rebate is overlapping, inasmuch as the same already stands covered under the denial of Cenvat Credit, inasmuch as the rebate has been claimed from the very same Cenvat Credit amount. At internal page 303 of the impugned order, the Original Authority has denied to abate demand to that extent on the ground that since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the impugned Orders-in-Original dated 29/01/2010 & 29/03/2011. 10. Having considered the rival contentions and on perusal of the facts on record, we find that the basic allegations in the Show Cause Notice was that M/s Arora Aromatics did not receive inputs on which they availed Cenvat credit basically on the contention of Revenue that M/s Ruchi Infotech System, Jammu did not have facility to manufacture the inputs received by M/s Arora Aromatics and that the goods did not move from Jammu & Kashmir to the appellants factory and therefore, Cenvat credit was not admissible. The evidence submitted by the appellant in the form of Order-in-Original passed by Commissioner of Central Excise, Jammu on 31/03/2008, wherein it was held that M/s Infotech System, Jammu was manufacturing the goods was not accepted by the Original Authority stating that the said Commissioner, Jammu did not see himself that the goods have been manufactured. If such a logic is accepted then the basic system of assessment by Authorities under tax statute needs to be concluded to have been not properly understood by the Adjudicating Authority. The present system of assessment in Central Excise is record based. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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