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TMI Blog2019 (4) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from alleged buyer of finished goods, whose name appeared on these loose sheets. Hence, there is no corroboration for the authenticity of loose sheets or averment of Shri Raman Bhatia - also, the adjudicating authority has not followed the procedure as prescribed under Section 9D of the Central Excise Act for placing reliance on the various statements recorded from the various persons, who were either the consignment agent/dealers/supplier of the goods. It is also stated earlier that no reliance can be placed on the third party evidence, without independent corroboration as has been done by the adjudicating authority. CENVAT Credit - Held that:- Although names of the various supplier of these inputs/raw materials were available with the investigators, however, they have not been examined and merely the credit have been denied to the appellant - no statements or any transporter to prove the scrap was loaded from any other premises then supplier of the goods during Alka Creations. Demand in respect of supply made by the appellant to M/s MBSC during the period from Jan. 2011 to October 2011 - case of the Revenue was that there is under valuation to the extent of ₹ 5/- t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naging Director of the main appellant company. M/s Jai Bhawani Concast Pvt. Ltd. (for short, JBCPL) is a consignment agent and dealer of the appellant company located at New Delhi and Shri Raman Bhatia is a Director therof. M/s MBSC is a dealer of the appellant company located in Jodhpur and Shri Sanjay Garg is proprietor and Shri Mohan Ram is an employee of the company. Shri K.K. Jain is Director of M/s Mudit Impex (P) Ltd., Delhi, who is also involved in the trading activities for M/s JBCPL as middle man. 2.1 Acting on the intelligence about the evasion of Central Excise duty by way of under invoicing of the excisable goods sold through their consignment agents M/s JBCPL and M/s MBSC by the main appellant, the officers of Director General of Central Excise Intelligence (for short, DGCEI) searched the factory premises of appellant on 15.11.2011 along with searches at residential premises of Shri Subhash Chander Kathuria, MD of the appellant company along with 11 other offices and residential premises of dealers/consignment agent including those of M/s JBCPL and M/s MBSC. A large number of incriminating documents were recovered at the time of search from the various places. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal against the dropping of the demand of ₹ 98,29,809/- against MBSC. 4. The main appellant has filed the appeal on the grounds: 4.1 that the whole demand of ₹ 40,76,894/- is based on the evidence of third party seized from the residence of Shri Raman Bhatia and the statement of Director of JBCPL. It is an established law that the third party evidences, particularly those of the co-noticee, is not to be relied upon without independent corroboration thereof. Since Shri Raman Bhatia was neither summoned and examined by the learned adjudicating authority in terms of Section 9D of the Central Excise Act. Further, he was also not permitted to the cross examined and hence the statement tendered by him should not have been relied upon by the learned adjudicating authority in the adjudication proceeding. 4.2 M/s JBCPL is the consignment agent of the main appellant in New Delhi, was also purchasing the goods from them, on their own account and reselling them to their buyer. M/s JBCPL s own sale, were generally confined to Delhi and nearby area. M/s JBCPL was also selling their goods to the main appellant also. It is submitted that out of the total quantity of 2195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from him on behalf of the main appellant was also categorically denied. 4.5 He, therefore, submitted that perusal of the documents seized from residence of Shri Raman Bhatia do not even remotely suggest that he was dealing with the main appellant as a consignment agent, as there is no mention of main appellant s name in any of the documents seized by the DGCEI. 4.6 It was also stated by ld. Advocate that the documents seized from Shri Raman Bhatia at his residence had been written by Shri K.K. Jain or Shri Shivaji, which was admitted by Shri Raman in is statement dated 15.11.2011. It is not evident as to why and how these documents written by Shri K.K. Jain were found at the residence of Shri Raman Bhatia. In this case, no statements were recorded from either Shri K.K. Jain or Shri Shivaji on this aspect. Both of them were never examined during the course of investigation or adjudication. 4.7 During the relevant period, the main appellants were selling their products to other parties also apart from their consignment agent i.e. M/s JBCPL. During the investigation various dealers were also searched by DGCEI viz. Apex Alloys, Jodhpur, M/s Rajdhani Traders, Jodhpur, M/s Bho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moned or examined in support of allegation that the inputs have not been transported to the appellant factory. It is the submission of the learned Advocate that these goods were loaded from the premises of M/s JBCPL and were duly accompanied by GRs along with the name of consignor, that is M/s JBCPL. These invoices were also accompanied with Form VAT-47 from the Sales Tax department. Therefore, the allegation about the non-receipt of inputs but only invoices is incorrect and cannot be sustained. No enquiries were conducted from the VAT department also. 6. Although it is alleged and held by the adjudicating authority that the appellant obtained Bazar Scrap without any invoice, however, there is no evidence of transport thereof which was never brought on record by the investigating officer. It is on record that Shri Giriraj and Shri Deepak were alleged supplier of Bazar Scrap to the appellant they were never examined by the department. In view of above, there is no justification for denial of Cenvat credit to the main appellant on the basis of invoices issued by M/s JBCPL and M/s Alka Creations. 7. It was also submitted that the adjudicating authority had confirmed the view cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the percentage difference of shortage was only to the extent of 1.78% which is as per the permissible limit in accordance with Second Schedule to the Standard of Weight and Measures (Packaged Commodities) Rules, 1997. 8. Regarding the penalty imposed on Shri Subhash Chander Kathuria, the Managing Director of the appellant company under Rule 26 of the Central Excise Rules, 200 2 read with Rule 15(2) of the Cenvat Credit Rules, 2004, it was submitted that Rule 26 can only be invoked if the goods are held liable for confiscation and since there was no proposal in the show cause notice, to that effect, no penalty could be imposed on him. 9. Regarding departmental appeal for dropping the demand against M/s Maa Beri Steel Co., Jodhpur, by the adjudicating authority has given 18 grounds for dropping the demand. However, the department has chosen to contest the appeal on two grounds only. In para 33 of the impugned order, ld. Adjudicating authority relied on RUD 2.4.3A, which was also been relied by the department to substantiate their claim that cash amounts, over and above the invoice value, were remitted by the dealer to the appellants. However, learned Commissioner held that in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are different entities and had different market, which varies from one place to another. The department appeal, as per learned Advocate, is based on price of SS flats sold by the appellant to M/s MBSC, which were higher than the sale price of SS flats by other manufacturers at Jodhpur, which indicated that sale price was not correct. This ground is not acceptable as the market for the product are different and the prices from place to place by dealers the dealer are same cannot be comparable with one another. The department is being selective as the Commissioner has dropped the penal proceedings against M/s MBSC and Shri Sanjay Garg. This part of the order has not been challenged by the department and, therefore the learned Advocate submits that the departmental appeals has no leg to stand and deserves to be dismissed. 11. On behalf of the Revenue learned AR supported the order passed by learned adjudicating authority on the ground mentioned to the extent of confirmation of demand to the appellant. Further, the demand dropped by the adjudicating authority regarding MBSC he supports the grounds contained in the Review Order. 12. We have heard the party and perused the record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority has denied the credit without following the decision of Hon ble High Court of Allahabad in the case of Juhi Alloys (supra). We also find that although names of the various supplier of these inputs/raw materials were available with the investigators, however, they have not been examined and merely the credit have been denied to the appellant. Further, we also find that no statements or any transporter to prove the scrap was loaded from any other premises then supplier of the goods during Alka Creations. 16. Regarding dropping of demand to the extent of ₹ 98,29,809/- the department has not rebutted a categorical finding of the adjudicating authority. This demand arose in respect of supply made by the appellant to M/s MBSC during the period from Jan. 2011 to October 2011. The case of the Revenue was that there is under valuation to the extent of ₹ 5/- to 10/- for SS flats in respect of sales to M/s MBSC by five years. However, no sufficient corroborative evidence was brought on record to prove this charge by the Revenue. Though, the statements were recorded from Managing Director, he was not questioned about the valuation with regard to clearance to M/s MBSC. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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