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TMI Blog2018 (12) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... on behest of main appellant. Further it can be noticed that the main appellant was taking a consistent stand before the lower authorities they had religiously recorded the receipts and consumption of imported goods in the statutory of books and cleared manufactured products on payment of appropriate duty. The details as given by main appellants in form of RG-23A part I&II, RGI etc., are not controverted by the Adjudicating Authority in the findings (which are reproduced herein above) but pleas were dismissed by recording that the main appellant had not produced evidence of receipt of materials in their factory. The main appellant’s contention that they had manufactured final products and cleared the same during the period in question remains uncontroverted. As regards the RG-23 part I& II and statutory books - Held that:- This position is unchallenged, it can be noted that same were maintained and produced before audit parties during scrutiny of records, on various dates for the period in question. If that be so and there being no adverse observation in the various audit report, as to there may be a case of non-receipt of inputs, entire case of the revenue is based on the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining to purchase of copper ingots/scraps on high sea sales basis from M/s. MM Enterprises, Chennai without the actual receipt in their factory of manufacture at Patancheru in A.P. and their consumption in the manufacture of finished goods. Resultantly, it is also alleged that the fraudulently availed CENVAT credit based on those Bills of Entry and utilized the same for payment of duty on their finished goods. The details of same are as under: Sl. No. Bill of Entry No. Date 1. 753222 30-11-2004 2. 810170 25-02-2005 3. 984363 03-10-2005 4. 995676 17-10-2005 5. 607198 27-10-2005 6. 684093 15-09-2004 7. 690506 28-09-2004 8. 350388 03-11-2004 9. 361098 12-04-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 received at the Railway Yard were booked for dispatch to Tuglakabad, New Delhi by M/s. Indo Aryan Central Transport. Further, M/s. Indo Aryan Central Transport have submitted the Xerox copies of consignment notes no. 908-6083 dated 08.12.2004 and the relevant Lorry Challan for transport of 27.320 MTs of Copper ingots from Turbhe to New Delhi in CONCOR container No. NSAU 2088023 which is corroborated by the forwarding note no. 41247 of CONCOR. In respect of consignment imported under Bill of entry No. 984363 dated 03.10.2005 consignment note Nos. 124 and 125 dated 05.10.2005 showing transport from Mumbai to Hyderabad was issued by M/s. Oriental Logistics, which is admitted by Sri. Chaglani, Proprietor who deposed that only LR/consignment notes were issued without undertaking actual transportation of the goods. Verification of financial records i.e. Carriage Inward Account of M/s. Cubex has revealed that no transport charges are booked for the impugned Bill of Entry. 2.4 As regards the Bills of entry no from 6 to 11 detailed in the table supra, the case of the investigation is that M/s. Oriental Logistics Cargo Carriers, Chennai have only issued consignment notes without unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges, which however is not reflected in the Carriage Inward Account of M/s. Cubex. 2.5 As regards Bill of Entry No. 868396 dated 17.08.2006 at Sl. No. 12 of the above table (in para 45 supra), Sri Chandrabhan A. Singh of M/s Reliance Air-Sea Services, in his statement dt. 16.05.2008 has categorically stated that he organized LR of M/s Sai Cargo Movers showing transport from Nhavasheva to Medak, Hyderabad on the request of Sri Manish Mardia where M/s Sai Cargo Movers have shown freight of ₹ 28,600/- and advance of ₹ 10,750/- with balance amount of ₹ 17,850/- to be paid to the driver. Sri Chandrabhan Singh has further elaborated that ₹ 10,750/- shown as advance was the amount he had charged from Cubex for delivery upto Bhiwandi. In the Bill No. 114/06-07 dated 26.08.2006 of M/s Reliance Air-Sea Services, only ₹ 10,750/- was charged for transport. In the LR No. 037 dt. 24.08.2006 of M/s Sai Cargo Movers, total freight amount is shown as ₹ 28,600/- out of that ₹ 10,750/- was shown as advance and balance amount of ₹ 17,850/- is shown amount to be paid to driver. As seen from the voucher C 1555 dt 31.08.2006 of Cubex, an amount of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. It is his further submission that the period involved in the case in hand is 25.09.2004 to 04.09.2016 and the show cause notice is issued to appellant on 24.09.2009; that during the relevant period in question, appellant had filed various returns as required under statue indicating the receipts consumption of the materials on which the CENVAT credit was availed; audits were conducted in April, 2006, January, 2007, March 2008 and February, 2010 and there was no allegation that the main appellant had received only the documents and not the materials indicated in such documents hence the authenticity of the documents is not in due. It is his further submission that the Adjudicating Authority in the impugned order has summarily brushed aside the submissions made by main appellant as to in the absence of such huge quantity of scarp, as indicated in the allegation, the main appellant could not have manufactured of final products and cleared the same without payment of duty. He draws our attention to the procurement of scrap which according to the Revenue was not received and submits that correspondingly, there is no findings as to how during the period in question appellant had manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indo Arya Central Transport Ltd in the Turbhe Railway Yard given on dt 17.05.2008 6.06.2008 (Annexure A-18 A- 19 to SCN),and records produced by him it is held that as per the directions given to him by Shri.ManishMardia on phone and based on the particulars furnished by the persons accompanying the containers he used to book the consignments to Delhi by CONCOR container. further that he had handled about six to seven copper consignments of Sri Manish Mardia in the above manner; and the details produced by Sri Omprakash Jhangra, vide his letter dt 06.06.2008 20.06.2008, such as copies of consignment notes, relevant documents, i.e; their LRs, Copy of Lorry Challans, IWBs of CONCOR and Money receipt with regard to receipt of their payment as a proof of booking the cargo to Delhi it proves that the goods were sent to Delhi instead of Hyd. (III) Report of CONCOR Turbhe railway container yard On the basis of details submitted by Sri. Omprakash Jhangra, further details were called for from M/s.Concor and from the report submitted by Terminal Manager, CONCOR, Turbhe Railway Container yard vide letter dt 24.05.2008 (Annexure -B/3 to SCN) it is found that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bill of entry No. Date. Description of material Port of import Name of the transporter remarks 1. 684093 15.09.2004 Copper ingots Chennai Oriental Consgn.Note nos.71A dt 20.09.04 2. 690506 28.09.2004 copper Chennai Oriental Consign.Note Nos.73A dt.07.10.04 3. 350388 03.11.2004 Copper Ingots Tuticorin Oriental Consign.Note Nos.78A dt.15.11.04 4. 361098 12.04.2005 -do- Tuticorin Oriental Consign.Note Nos.103 dt.22.04.05 5. 369392 10.08.2005 -do- Tuticorin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heques. E.2 . In respect of the same Bills of entries the appellant had also produced way bills generated in the name and style as Form XX-A issued by Tamil Nadu General sales tax Rules 1959 with the numbers of trailers/lorries as a proof of transport of the goods from Chennai/ Tuticorin to Hyderabad, as detailed below. Sl. No. BE.No./dt FormXX-A/date Trailer/lorry no. consigner From To 1 684093/ 15.09.04 806563/ 16.09.04 906584 16.09.04 TNQ1926 TNQ1926 Fair Deal Enterprises Chennai Hyd 2. 690506/ 28.09.04 906633/ 06.10.04 794756/ 06.10.04 TND6897 TND 6897 -do- Chennai Hyd 3. 350388/ 03.11.04 503747/ 11.11.2004 TN28Q 0649 A.M.Ahamed Co. Chennai Hyd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 350388 dt 03.11.2004 78A dt. 15.11.2004 TN 27AL 1310 NO(111) 4 361098 dt 12.04.2005 103 dt. 22.04.2005 TN 22AB 1010 NO(110) 5 369392 dt. 10.08.2005 115 dt.19.08.2005 TN 22AB 1016 NO(109) 6 984363 dt.03.10.2005 124 dt.05.10.2005 TN 22AB 1016 NO(108) 7. 984363 dt 03.10.2005 125 dt.0510.2005 TN 22AB 1010 NO(107) 8 607941 dt.28.10.2005 133 dt.23.11.2005 TN 22AB 1016 NO(106) 9 607941 dt.28.10.2005 134 dt 23.11.2005 TN 22AB 1010 NO(105) 10 868396 dt.17.08.2006 37 dt.2408.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -- Delivered at Turbhe 5. 607198 27.10.2005 -do- Nhavasheva Mumbai -- Delivered at Turbhe In respect of bill of entry No.984363 DT.03.10.2005,(Sl.No.3) Consignment note Nos. 124 and 125 dt 05.10.2005 showing transport from Mumbai to M/s. cubex was issued by M/s. Oriental Logistics and cargo carriers and in respect of other four no transport documents evidencing the transport of material from Mumbai to M/s. Cubex Patancheru, Hyderabad are available. Further as seen from the CHA bills as detailed below, Sl.No. CHA bill no. BE NO. 1 108/04-05 DT.11.12.2004 753222 DT. 30.11.2004 2. 156/04-05 DT.08.03.2005 810170 DT. 25.02.2005 3. 108/05-06 DT.22.10.2005 995676 DT. 17.10.2005 4. 114/05-06 DT.16.11.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78A dt.15.11.2004 4. 103 dt 22.04.2005 In the case of bill of entry No.690506 dt.28.09.2004 as per the books submitted by Shri. Chaglani Consignment note 73A dt 7.10.2004 was issued, however for the same bill of entry, as available in the books with the M/s. Cubex consignment notes 72 73 dated 6.10.2004 were issued by Mr. Chaglani. For these consignment notes i.e. 72 73 an amount of ₹ 8500 each was shown as paid in cash. These amounts shown as paid in cash were not reflecting in the bank statement of Shri. Chaglani and further these consignment notes does not have any vehicle numbers to show that the material has been transported to Hyd from Chennai. So for the same bill of entry parallel consignment notes with different Sl. Nos have been issued. Even to consider that the amounts paid by cheque pertains to other three consignment notes i.e. 71A, 78A and 103 is not possible since at the time of issue of the above consignment notes Shri. Chagalani has not even opened a Bank account. The Bank account was opened in the month of July 2005.. The cheques were issued after a gap of 8 to 10 mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TMD 6897 06-10-2004 173/174 10. 350388 03-11-2004 TN28Q 0649 11-11-2004 182 11. 361098 12-04-2005 TN69J 2499 Trailer No. TDL 6912 18-04-2005 184 12. 369392 10-08-2005 TN69J 2449 17-08-2005 187 It is his further submission that the letter relied upon by the Learned Departmental Representative as also by Commissioner on the letter of Concor, that none of the bill of entry number is not mentioned in the letter of Concor Corporation has been is reflected in the register maintained by Concor. Then, he draws our attention to the said register and submits that in the absence of any mentioning of bill of entry, it cannot be stated that the consignments were loaded and dispatched to Tughlakabad; that having not granted cross examination of these officers that evidence needs to be discarded. 7. We have heard both sides and perused the records. 8. On perusal of records, it is noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposal for confiscation as they did not avail any CENVAT credit on the same and no contravention of Rules was found. Purchase of non-duty paid bazaar scraps and not accounted in their records, supports the allegation of clandestine procurement of raw materials, manufacture of finished goods out of it and clearance of finished goods on payment of duty utilising fraudulently availed CENVAT credit on alleged imported materials. This goes on to prove that M/s Cubex have manufactured and cleared finished goods without the actual receipt of the material pertaining to the impugned Bills of Entry. As far as the reliance placed on the Forms XXA of Tamil Nadu Sales Rules in support of the contention that the consignments were transported from Chennai to Hyderabad, it is common sense that the goods have to invariably pass through the Sales Tax check posts of Andhra Pradesh before reaching the factory of manufacture. Enquiries with the Commercial Taxes Department of Government of Andhra Pradesh have revealed that none of the consignments have entered the state of Andhra Pradesh leave alone reaching Medak District which is at a considerable distance from the Andhra Pradesh-Tamil Nadu borde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was taking a consistent stand before the lower authorities they had religiously recorded the receipts and consumption of imported goods in the statutory of books and cleared manufactured products on payment of appropriate duty. The details as given by main appellants in form of RG-23A part I II, RGI etc., are not controverted by the Adjudicating Authority in the findings (which are reproduced herein above) but pleas were dismissed by recording that the main appellant had not produced evidence of receipt of materials in their factory. Adjudicating authority has not considered the plea holistically as to how can a manufacturing activity take place, without receipt of raw materials. To that extent, the main appellant s contention that they had manufactured final products and cleared the same during the period in question remains uncontroverted. As regards the RG-23 part I II and statutory books, it is noticed that this position is unchallenged, it can be noted that same were maintained and produced before audit parties during scrutiny of records, on various dates for the period in question. If that be so and there being no adverse observation in the various audit report, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was receipt of imported goods at Turbhe and transported to place other than Hyderabad. We find that the main appellant had been seeking cross examination of the officials, which was declined by the Adjudicating Authority. It is settled law that no reliance can be placed on a document which is not tested in cross examination if specifically sought. At the same time, we are of the opinion that Adjudicating Authority should be extended an opportunity to consider the plea of cross examination of the individuals from Concor Corporation. Accordingly, we remit the issue in respect of demand of bills of entry No. 984363/03.10.2005, 995676/17.10.2005 607198/27.10.2005 (as at page No. 209 of appeal Memo) to the Adjudicating Authority to reconsider the issue. Needless to state that the adjudicating authority will follow principles of natural justice before coming to a conclusion. As regards penalties on individuals, we note that on majority of demand is set aside, on merits itself, we have to hold that penalties on individuals cannot be sustained. Accordingly penalties on all appellants are set aside. 13. In sum demand confirmed as ineligible CENVAT credit in respect of bill of entry ..... 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