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TMI Blog2020 (3) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... dence is against the appellant and in favour of the Revenue. Invoices at Sl.No. 3 to 7 issued by M/s Swastik Insulators on the basis of invoices received from M/s M.M. Enterprises, Chennai. The evidence adduced by the Revenue in respect of these consignments is the aforesaid statement of Shri R.S. Elanjeran, Proprietor of M/s Swastik Insulators who affirmed that he had neither received the goods nor supplied the same which he stood by in the form of a letter when called for cross examination. He was not cross examined as he was suffering from cancer. There is no dispute regarding the transporters or the truck numbers as far as these goods are concerned. The invoice at Sl.No. 8 of the statement issued by M/s Sree Enterprises, the evidence which the department has in respect of these invoices is the statement of Shri Anil Goel recorded during the investigation which was negated by him when cross examined during hearing before the adjudicating authority. He was not re-examined by the Revenue to prove that his original statement was correct and his statement during cross examination was not correct - Shri Anil Goel in his statement asserts that all materials were received and so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of Section 11A of the Central Excise Act, 1944 and the proviso thereto. It also proposed to deny and recover an amount of ₹ 6,01,183/- taken as CENVAT Credit on the strength of one invoice listed in Annexure D-2 under the same provisions. Interest was also demanded under section 11 AB and penalty was proposed to be imposed under section 11AC of the Central Excise Act, 1944 and also under Rule 25 of Central Excise Rules, 2002. It was also proposed to impose penalties upon Shri P.R. Bhandari, Managing Director, Shri U.M. Bhandari, Executive Director and Sri Surendra Prakash Bhandari, Chief Executive of the assessee firm under Rule 26 of Central Excise Rules, 2002. 4. After following due process the Ld. Additional Commissioner by her Order-in-Original No. 13/2011(C.E.), dated 29.03.2011 confirmed the demands along with interest and imposed penalties as proposed in the show cause notice. Aggrieved, the appellants appealed to the first appellate authority who, by the impugned order, upheld the order of the lower authority and rejected the appeals. Hence these appeals. 5. The issue in dispute is whether the appellant assessee is entitled to CENVAT Credit on the disputed ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derabad while Sl.No. 8 issued by M/s Sree Enterprises, a manufacturer based in Secunderabad. Sl. No. 1 2 are issued by M/s Swastik Insulators selling the material which they are said to have received from M/s Rajeswari Metallurgicals Limited, Bhiwadi, Mumbai while Sl. No. 3 to 7 have been issued against the material said to be sourced from M/s M.M. Enterprises, Chennai. Sl. No. 8, of course, is a manufacturer s invoice. 7. I now proceed to examine the evidence in respect of three categories of invoices i.e. Sl. No. 1 2 where the invoices were issued by M/s Swastik Insulators based on the material said to have been sourced from M/s Rajeswari Metallurgicals Limited, Bhiwadi, Mumbai, Sl. No. 3 to 7 where the material was said to be sourced from M/s M.M. Enterprises, Chennai and Sl. No. 8 being the manufacturer s invoice issued by M/s Sree Enterprises. a) Sl. No. 1 and 2 : These invoices were issued by M/s Swastik Insulators. Revenue seeks to deny CENVAT Credit against these invoices on the basis of the investigations conducted by DGCEI which showed that the appellant had not received any material against these invoices and has only received the invoices and took credit. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kshaw while AP-03-6372 was a motor cycle and therefore they could not have carried the goods. 8. Statements of Shri P.R. Bhandare, Shri U.M. Bhandare and Shri Surendra Prakash Bhandare of the appellant assessee were recorded by the Officers who affirmed that all the goods have been received against the invoices and have been accounted for in their stock registers and utilised in the manufacture of their final products. There was no discrepancy in either receipt of the goods or in their utilisation. There was no discrepancy in recording CENVAT credit in their RG-23 reports also. Therefore, these three statements are against Revenue s case and in favour of the appellants. 9. During the hearing before the original adjudicating authority, Shri Jayaram Muthukali, Managing Director of Rajeshwari Metallurgicals Limited, Bangalore was cross examined by the appellant s advocate on 03.02.2011 in which he has affirmed that all goods were despatched as indicated in the documents. He further stated that M/s Swastik Insulators are their consignment agents and he had sent material to M/s Swastik Insulators and payments were received by cheques. On being specifically asked about contrary sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eexamined Shri Jayaram to prove that he has turned hostile and made false statement during cross examination. Therefore, at this stage, the statement of Shri Jayaram Muthukali before the Officers has no validity. 12. Cross examination of Shri R.S. Elanjeran, Proprietor of M/s Swastik Insulators who issued the invoices, was also sought. However, he could not appear as he was suffering from cancer and requested to dispense his cross examination and affirmed that he goes by whatever he had given before the Officers of DGCEI. 13. Sl.No. 3 to 7 of the table above These invoices issued by M/s Swastik Insulators on the strength of the material said to have been received from M/s M.M. Enterprises, Chennai. The departmental evidence in respect of these invoices are (i) Statement of Shri R.S. Elanjeran, Proprietor of M/s Swastik Insulators that they have not received the material or sold it to the appellant but only issued invoices and recorded receipt of sales in their Registers. Shri R.S. Elanjeran, as discussed above, was not available for cross examination as he was suffering from cancer but he affirmed in writing that he stands by whatever statement he gave before the investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice of M/s Sree Enterprises is located in New Delhi and it is owned by Shri Sanjay Bansal. The local head of Sree Enterprises is one Mr. Anil Goel. Investigations conducted by DRI in Delhi showed that the appellant is importing copper rods and selling them in the market. Further investigations also showed that they are supposed to have imported copper rods through ICD Hyderabad and have drawn the same into copper wires and sold to the appellant. Power consumption during the relevant period with Sree Enterprises was so slow that it would be impossible for them to have manufactured the wires. M/s Sree Enterprises had shown purchase of copper scrap and copper rods from otehr suppliers viz., Ganesh Metal Company and Ganesh Metal Agency etc. Examination of the VAT, TIN quoted in the invoices of M/s Shree Ganesh Metal Agency showed that the TIN was not existent and was not allotted to anybody. 16. Shri Dharmendra Sharma, authorised signatory of M/s Sri Ganesh Metal Company was summoned and in his statement on 26.09.2007 indicated that they are registered with the Sales Tax Department but he had no knowledge of any firm with the name of Sri Ganesh Metal Agency during copper scrap busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records and registers. Shri Elanjeran has not been cross examined as he was unwell but he gave in writing a letter that he stood by whatever statement he had made before the Officers of DGCEI. Therefore, to this extent, the evidence is against the appellant and in favour of the Revenue. The second piece of evidence is the statement of Shri M. Jayaram, Managing Director of M/s Rajeswari Metallurgicals Limited, Bhiwadi, made on 26.05.2008, supporting the Revenue s case. He was cross examined and has negated his own statement. He affirmed that all goods were supplied as per the records. Revenue did not re-examine Shri M. Jayaram to disprove his statement. Therefore, the statement of Shri M. Jayaram in respect of these invoices is against the Revenue. The third piece of evidence adduced by Revenue in respect of these invoices is that enquiry by the Officers showed that M/s Varna Transport who is supposed to have transported the goods in question was not available at the address indicated in the documents and had never been there at that location. When Shri M. Jayaram was questioned about this and he asserted that he had not only sent the goods through M/s Varna Transport to Hyderabad b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oprietor of M/s Swastik Insulators who affirmed that he had neither received the goods nor supplied the same which he stood by in the form of a letter when called for cross examination. He was not cross examined as he was suffering from cancer. There is no dispute regarding the transporters or the truck numbers as far as these goods are concerned. The second piece of evidence by the Revenue is the statement of Shri M. R. Mardia, Proprietor of M/s M.M. Enterprises, affirming that they have issued invoices without actually supplying the goods. Shri Mardia was cross examined during adjudication and has negated his earlier statement. Revenue has not re-examined Shri M.R. Mardia and therefore the evidentially valued the statement of Shri M.R. Mardia is no longer exists. The last piece of evidence adduced by the Department is the statement of Shri Dilip Kothari, who does not confirm anything regarding the specific transaction but only affirms that he had introduced the appellant to M/s Swastik Insulators and M/s Swastik Insulators to M/s M.M. Enterprises. 20. The invoice at Sl.No. 8 of the statement issued by M/s Sree Enterprises, the evidence which the department has in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truck number and that itself should not deprive them of their CENVAT credit. Considering the totality of the evidence, I do not find sufficient evidence to deprive the appellant of the CENVAT Credit on these two invoices and it is not in dispute that receipt of the goods has been accounted for and the amounts have been paid and goods have been taken to recount for manufacture of the final products. Some of the statements which were relied upon by the Department were negated during cross examination and the Department has not re-examined them all. The only evidence against the appellant is the statement of Shri R.S. Elanjeran, Proprietor of M/s Swastik Insulators, on 31.03.2008 and the fact that one of the truck numbers on which the goods were supposed to have been received was indeed a motor cycle. It was perfectly possible that there was a typographical error in mentioning the vehicle number. As the Department had committed an error in not verifying the vehicle No. AP 07 TF 9777, but had instead verified the vehicle No. AP 07 TT 9777, it is an equally possible human failure that the person preparing the documents to have erred in mentioning the vehicle number. Under these circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t have manufactured the copper wire. Since they could not have manufactured the wire, they could not have supplied the goods to the appellant. Therefore, the invoice is fake and no CENVAT Credit is admissible. I find that Shri Anil Goel, Chief Executive of M/s Sree Enterprises has asserted during the cross examination that they had indeed received all the materials indicated in their records and they had consumed sufficient power to manufacture the goods. He further asserted that they have sold the goods to the appellant and received sale consideration by account payee cheques. So, it is a case of the statements of Shri Anil Goel vs. Investigations done by the Officers. The truth could have come out if Shri Anil Goel was re( examined at length by the Department during adjudication proceedings and to show if he was lying. This was not done by the Department. In view of the above, I find that the assertion of the Department that M/s Sree Enterprises could not have manufactured the goods and therefore by implication have not supplied the goods, cannot form the basis to deny the appellant CENVAT Credit. At any rate, the present dispute is regarding entitlement of the CENVAT Credit by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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