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TMI Blog2019 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... se of imported ingots purchased on high seas sale basis, payment was made to the importers through banking channels and even the payment to CHAs for clearance of goods was made by the Appellant. In case of such imported goods, the goods were transported by the importers as the Appellant has made all inclusive payments to them. Similar is the situation in case of 26 consignments purchased by the appellant from M/s Shri Vaishnudevi Metals, Jammu. The statutory and private records maintained by the Appellant clearly show the payments towards the goods as well as accounting of goods in their records and further usage and use in production. The finished goods manufactured out of such inputs have been cleared on payment of duty. The appellants were not concerned or engaged in deputing the transporters. We find that though the reports from transport or commercial department check post states that the goods did not crossed the border posts, however in case of 24 trucks the documents bears stamp of check post. Thus for the reasons that the LRs do not bear the check-post stamp, it cannot be concluded that the goods did not pass through the transit state. The third party records, i.e. transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Orderin- Original No. 48-50/VDR-II/GVFPL/HLL/COMMR-09 dated 27.02.2009 passed by the Commissioner of Central Excise, Vadodara-II. Vide aforesaid order, a demand of ₹ 18,39,876/-, ₹ 64,57,520/-, ₹ 1,31, 95,706/- of cenvat credit along with penalty has been demanded on goods, i.e. Copper Ingots / imported Ingots / Bars, which were purchased by the Appellant from M/s Annapura Impex Pvt Ltd (AIPL), Ludhina, Shree Vaishnodevi Metals, Jammu and imported from Sri Lanka. 2. The above demands were raised by three show cause notices. In case of demand of Rs, 18,39,876/-, show cause notice dated 14.8.2007 alleged that they have shown receipt of Copper Ingots from M/s AIPL and availed credit on the strength of invoices issued by M/s AIPL. The transporter Shri Indrajit Singh of Satkar Tempo Transport Union denied transportation of goods and as per Check-post reports of Commercial Tax Department, the goods did not pass through the check post. M/s AIPL has only issued invoices to enable the buyer to avail cenvat credit and to camouflage such transactions, cheques were taken from the buyers, which were deposited by M/s AIPL. The show cause notice had also relied upon the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts for transportation from Delhi to Gujarat. Smt. Shamala Shriram Pillai, booking clerk of M/s Time & Space Haulers at Delhi office stated that LRs for transportation of Copper Ingots were not entered into the booking registers on the instruction of Mr. Hemant Agrawal, Partner of M/s Time & Space Hauler. Partner Shri Praveen Agrawal stated that they have issued LRs for transportation of imported Copper Ingots from Delhi to different manufacturers of articles of copper located in Gujarat, Daman, Silvassa but no goods against such LRs were transported. Another partner, M/s Satish Agrawal also stated same. Most of the LRs of Delhi branch got issued from their Mumbai office and not from Delhi or UP border offices. From the dates of the LRs, which shows that the vehicles were actually available elsewhere on either check-post of Gujarat State and hence could not have been used for transportation of Copper Ingots from Delhi to the factory premises of the manufacturers. The investigation at Bajrang Transport Co. revealed that the said transport does not exist, which implies that no goods were transported. It also revealed that in case of one of the consignments of 26,440 kg of the consign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory and all such inclusive charges of goods were paid by the Appellant through banking channels. The allegation based upon statement of transporter or the check post report is not applicable as the transporter was engaged by the consignor. Further if the goods has not been found to be entered in check post records, it cannot lead to inference that the goods were not consigned to the Appellant's factory. The investigation has found that the Appellant had made all payments against purchases to M/s AIPL through bank. Thus even though the supplier has withdrawn heavy amount in cash, it cannot be said that the Appellant has received only cenvatable invoices to avail fraudulent cenvat credit. The Revenue has though relied upon the Show Cause Notice dated 14.5.2007 issued to M/s AIPL by the Commissioner, Ludhiana, but even if M/s AIPL had no Ingot manufacturing machinery or insufficient electric consumption still when the goods has been received by them and no discrepancy was found at the Appellant's end, the credit is available to them. The director of Appellant concern Shri V.K. Gupta in his statement has confirmed that the RG-23 A (Part I & II) and excise under Rule 7 Report of 2003-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een shown to be issued by M/s Time & Space to the Appellant showing M/s D.V. Bakshi as consignor. However, the party is Taha Wires, Daman and not the Appellant. The partners of M/s Time & Space Shri Praveen Agrawal and Shri Satish Agrawal, whose statements were relied in the show cause notice, their crossexamination was not allowed. Shri V.K. Gupta in his statement dt 28.9.2007 has clearly stated that the imported goods were received, utilized and payments were made to high sea sale sellers and records of receipts were maintained in statutory records. Thus, the allegation of non-receipt of goods based on general investigation of M/s Time & Space cannot be relied upon. In case of transporters M/s Bajrang Transport Co, no investigation was conducted at the said transporter and more on the report of the Dy. Director, MCD, Sanjay Gandhi Transport Nagar, it was contended that no transporter at Plot No. AW-270, Sanjay Gandhi Transport Nagar existed. The adjudicating authority has relied on para 14.6 regarding anomaly in date of entry in RG-23A, Part-I showing receipt on 19.1.06 against the date of LR as 20.01.06 in respect of one of the 4 consignments handled by M/s Bajrang Transport, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iries conducted at various check-posts of the border states of Gujarat, Rajasthan / Madhya Pradesh indicated that not even a single subject consignment of copper had passed through the said check posts. He submits that they had no idea about all these aspects as all these are relevant to the transporters, whose payments were made by the respective suppliers / importers, as stated by Shri V.K. Gupta in all his statements. Secondly, they are not aware as to through which route the trucks had travelled and / or through which check-post they entered in the state of Gujart to arrive at their factory; they should not be held responsible or answerable for any short coming on this account. No driver was interrogated. The show cause notice has contended that the cheques issued by the Appellant were deposited by M/s AIPL in different accounts and were withdrawn and further that the entries in such bank accounts of AIPL revealed that no payments were made to raw material suppliers. The Ld. Counsel also submits that Shri V.K. Gupta in his statement has categorically stated that no advance payment was made to AIPL when goods were received on credit. All inclusive payments were made after receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s like Shahadra / Madloi etc. after clearances from ICD. In such case, the statement of the local transporters of not transporting the goods upto the appellant's premises is irrelevant. The Revenue has relied upon the report from the Transport Department's check-posts that the goods did not enter the state of Gujarat. He submits that the report dt. 9.8.07 of the Dy. Directors of Transport relied upon by the Revenue was compiled from the data originated from the various check-posts across the border from Shamlalji check-post and hence the Transport Commissioner's report depends upon the quality of records maintained at the check-post. The said documents cannot said to be reliable. He points out that out of the 32 consignments, i.e. 12 in case of show cause notice dt 5.10.2007 (pertaining to imported goods) and 26 trucks in case of show cause notice dt 4.1.08 (originated from Jammu), 24 trucks were stamped at the check-post. However, even as per check-post record, these trucks have not entered, which clearly shows that the report of the Transport Department is not reliable. He further submits that if the owners of the vehicle has denied deployment of vehicles for transportation of go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s statements of transporters regarding non-transportation of goods were involved. In fact, the evidence and allegations in the present proceedings were ad - verbatim similar to most of the cases stated above. So much so, in case of Dhanlaxmi, Siddhartha Bronze, Akshay LPG, STI Industries (supra), the very same source of supply was there, i.e. either Jammu based suppliers or M/s Annapurna Industrial or imported at ICD, Tughlakabad (Sri Lankan origin). It was also held that the statements of transporters, being merely a third party / co-accused, cannot be solely relied upon to confirm such serious charge, merely because state check-posts records do not show movement of vehicle from its records. 10. Shri A. Mishra Ld. AR appearing for the Revenue supports the findings of the impugned order and relies upon the investigations made at the end of the transporters and CHAs. He submits that since the goods were not received in the Appellant's factory, the credit has been rightly denied. 11. Heard both the sides and perused the records. We find that the demand of ₹ 18,39,876/- has been made on the ground that the Appellant has availed credits on the basis of invoices issued by M/s AI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence that the appellant procured any goods locally to re-furnish the quantity, which is allegedly not received by them. Not a single seller of such goods has been brought on record to show that the Appellant procured any other goods in lieu of goods, which has allegedly not been received by them. The goods were transported by the transporters, which were arranged by the sellers of goods under the cover of lorry receipts and the payments were made by the Appellant on account of such purchases of goods as well as transportation of goods through banking channels. Such payments also stands recorded in the appellant's books of account. The appellants were not concerned or engaged in deputing the transporters. We find that though the reports from transport or commercial department check post states that the goods did not crossed the border posts, however in case of 24 trucks the documents bears stamp of check post. Thus for the reasons that the LRs do not bear the check-post stamp, it cannot be concluded that the goods did not pass through the transit state. The third party records, i.e. transporters record or their statements, cannot be made basis for alleging contravention by the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded that the trucks did not transport the goods to the appellant factory. 15. In case of Monarch Metals Pvt Lt - 2010 (261) ELT 508 (Tri), the Tribunal has held that the SCN issued on the ground that LRs did not bear the check-post stamp and statement of transporter confirming non-transportation of goods cannot be ground to deny cenvat credit to the recipient of the goods. The relevant part of the same is as under :- Para 7. Being aggrieved with the above order, Revenue filed the appeal before Commissioner (Appeals), who has allowed the same by observing as under : "9. The first respondent has contended that two invoices were not found in the list of relied upon documents and therefore no investigation was conducted related in those invoices. I am of the view that the investigation was conducted on the basis of LRs and not on the invoices. The three LRs which were taken up for investigation covered the goads in question and it was proved that the vehicles and goods shown in the LRs were not transported at all from Delhi. Therefore, I do not find any merits in the argument of the first respondent that the demand for those two invoices should be dropped. The contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal Nos. E/686, 693/2009 with consequential relief to the appellants. Appeal Nos. E/802, 840, 925/09 : (i) The Modvat credit of ₹ 2,83,191/- stand denied to M/s.Dhanlaxmi Tubes & Metals Industries (for short DTMI) along with imposition of penalty upon various persons on the ground that the inputs such as copper scrap, copper wire scrap, copper rod etc. have not actually been received by them and only invoices have been issued by the dealer PMM. For the above finding, the lower authorities have, though admitted, movement of trucks to Nadiad under the cover of LR issued by the transporter, but have denied the credit on the ground that delivery register of the transporter showed that the goods were of miscellaneous nature and not copper. I find that apart from the above, there is no other evidence to reflect upon the fact that the inputs were not actually received by the appellant. In the present case, there is no dispute that the LRs were issued by the transporter showing the appellant as the consignee of the goods. However, Revenue has based his case on the Goods Register maintained by the transporter indicating the description of the goods as 'Miscellaneous'. This fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected against the assessee is to the effect that the record of the transporters shows that the vehicles through which the copper ingots/wire scrap were stated to have been sent, had actually transported goods other than copper ingots/wire scraps to the manufacturers at Gujarat, Daman or Silvassa. The entire case of the Department is based on the record of the transporters without the support of any other evidence. The record indicates that there is no dispute that copper ingots purchased from units located at Jammu were transported by trucks from Jammu to Delhi. After transshipment at Delhi, they were shown to be transported from Delhi to the premises of M/s. Pranav Metal Mart, at Nadiad. According to M/s. Pranav Metal Mart, the goods so transported have in fact been received by it under proper invoices. It is also the say of M/s. Pranav Metal Mart that the goods were sold to the assessee and it is the case of the assessee that such goods were received by it along with invoices. Para 5. A perusal of the order passed by the adjudicating authority indicates that the officers at the check post had entered the receipt of copper ingots in their record. Thus, even the official records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h indicates the description of the goods as "miscellaneous". According to the Tribunal, this fact, by itself, could not be held to be sufficient for arriving at the conclusion that the inputs were never transported to the assessee's factory. The Tribunal found as a matter of fact that all documentary evidence on record supported the assessee's case about the receipt of inputs, whereas there was no independent corroborative evidence produced on record by the revenue in support of its case. Para 8. From the facts noted hereinabove, it is apparent that the Tribunal has appreciated the facts of the present case in proper perspective and upon appreciating the evidence on record, has as a matter of fact, recorded that except for the goods registers maintained by the transporter, there is no other evidence on record to indicate that the assessee has in fact not received the goods in question. In the circumstances, in the absence of any evidence to the contrary being pointed out on behalf of the revenue, the conclusion arrived at by the Tribunal being based upon findings of fact recorded by it upon proper appreciation of the evidence on record, cannot be said to be unreasonable or perver ..... 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