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TMI Blog2022 (3) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... and the said disputed inputs used in manufacture of dutiable goods. The purchase of the goods under the invoices in question were booked in books of account. The payment against the said invoices were made through cheque. For confirmation of cenvat demand the learned Adjudicating Authority relied upon the admission of Director of Appellant recorded during the Panchanama dated 21.01.2011, wherein he admitted that they did not receive these goods physically but availed the Cenvat credit only on the basis invoices and Statement dated 28.01.20211 of Bhavani Shankar Vasu, Induction Furnace In-charge. It is on record that in the present matter Appellant also requested for cross -examination of Director and aforesaid Employee which has been denied by the adjudicating authority and for this only the separate appeal also filed by the Appellant. It is found that this denial of cross-examination has resulted in denial of principle of natural justice. In the present matters, the case of revenue also on the ground of transporters admission that the goods were not supplied to the appellant and according to their statements the vehicle number shown in invoices are not capable of transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADJ-COMMR-2013-14 dated 05/01/2017. Being aggrieved with the denial of request of cross-examination of Director and employee of the Company. All these appeals are taken up together for disposal since they are arising out of same investigation and involved the identical facts. For the sake of convenience, the brief facts are as under: 1.1 M/s Rajputana Stainless Ltd. are engaged in the manufacturing of Stainless Steel Billets, Bright Bars, Rounds, Flats etc. They are availing the benefit of Cenvat credit facility. During the investigation, it was found that they had availed the cenvat on old and used plates obtained from breaking of ships and also SS Cold Rolled Patta Pattis /flat and other scrap. Statements of persons including Director employees of appellant s company were recorded. Inquiry had been extended to suppliers and transporters who had issued invoices and transported the goods respectively. The DGCEI undertook investigation and came to the conclusion that Appellant have wrongly availed the Cenvat Credit on the strength of Invoices of SS Cold Rolled Patta Patti / SS Flats , SS Circles, SS Rounds, SS Bright Bars, SS Angle, SS Hex, SS Squares, Iron Steel plate obtain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S Coil, SS hex, SS Square, SS Bright Bar, SS Flat are finished goods themselves and are not manufactured for further melting for manufacturing of SS Billets are baseless as arose out of misunderstanding of process of manufacture of above products. All the above products are emerged by process of Hot Rolled or Cold Rolled of Billets or Wire Rods. At the time of rolling certain miss- roll or reject or short length products are also emerged and the same cannot be sold in to the market as finished products. Though the same are looks like finished goods. The said rejects are sold under the same nomenclature to scrap-melters for melting process as the same cannot be used for further production and needs to be converted into Billet again for further processing. The department has not considered that Appellant has manufactured 44,696MT of Finished Goods by using raw material to the tune of 52,157 MT during the impugned period. The allegation of department if assumed to be true that the appellant have not received the alleged quantity of input to the tune of 15,804MT then the Appellant could not have manufactured the finished goods as above. The goods manufactured by appellant is not contro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of the Appellant is unsustainable as per ratio led down by the Hon ble Apex Court in the case of Anil Chemical and Industries Ltd. reported in 2005 (183) ELT A31 (SC) and in the light of Judgment of Hon ble Tribunal in case of Metro (India) Woodcrafts Pvt. Ltd. Vs CCE, Patna reported in 2016 (333) ELT 418. 2.3 In respect of Appeal No. E/10693/2017-DB he submits that in the present matter show cause notice was issued to the appellant only on the basis of the Statements so recorded without establishing that the appellant have procured the material without cover of invoice. Thus the impugned show cause notice is only based on the statements without adducing any corroborative evidence. In the aforesaid facts appellant moved an application for cross-examination. The Original Adjudicating authority allowed the cross-examination of the manufacturer suppliers under whose cover of invoices the material were received by the appellant and cross examination was also allowed of transporters and their employees vide its order dated 01.02.16 and 03.03.16. Accordingly cross examination was conducted and during the cross-examination all those persons whose statements initially were recorded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of relevance of statement as evidence, Section 9D of Central Excise mandates cross examination of person whose statement is relied upon, otherwise the said statement cannot be relied upon in the proceedings. Not allowing the cross -examination it tantamount to breach of provisions of Section 9D of Central Excise Act, 1944. He place reliance on the following judgments in support of this contention. Mahek Glazes Pvt. Ltd. Vs. UOI 2014 (300) ELT 25 (Guj) Wellsuit Glass Ceramic Pvt. Ltd. vs. CCE 2014 (304) ELT 618 (Tri. Ahmd) PMS Int. Pvt. Ltd. Vs CCE 2014-TIOL-1669-CESTAT -DEL J K Cigarettes VS CCE 2011 (22) STR 225 (Del) Basudev Garg Vs CC 2013 (294) ELT 353 Swiber Offshore Construction Pvt. Ltd. 2014 (301) ELT 119 3. On behalf of Revenue Shri T.G.Rathod, Additional Commissioner (AR) appeared and reiterated the findings in the impugned order. He submits that from the investigations conducted by DGCEI /DGGI it is clearly brought out that Appellant has taken fraudulent credit without the receipts of materials/ goods in the factory. He strongly argued that, on enquiry at the end of suppliers and transporters revealed that Appellant have not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by - (i) a manufacturer for clearance of - (I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer; (II) inputs or capital goods as such; (ii) an importer; (iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002; (iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Central Excise Rules, 2002; or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty leviable under section 3 of the Customs Tariff Act, has been paid, except where the additional amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit] (4) The CENVAT credit in respect of input or capital goods purchased from a first stage dealer or second stage dealer shall be allowed only if such first stage dealer or second stage dealer, as the case may be, has maintained records indicating the fact that the input or capital goods was supplied from the stock on which duty was paid by the producer of such input or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him. (5) The manufacturer of final products or the provider of output service shall maintain proper records for the receipt, disposal, consumption and inventory of the input and capital goods in which the relevant information regarding the value, duty paid, CENVAT credit taken and utilized, the person from whom the input or capital goods have been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit. (6) The manufacturer of final products or the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the manufacturer. In the facts of the present case we find that the appellant have received the goods on duty paying documents and recorded the receipt of the goods in their raw material account and cenvat account i.e. RG-23A-Pt. I and Pt. II and the said disputed inputs used in manufacture of dutiable goods. The purchase of the goods under the invoices in question were booked in books of account. The payment against the said invoices were made through cheque. On the above statutory compliance, the Appellant correctly availed the cenvat credit. Thus the contention of the department that appellant have availed cenvat credit without receipt of goods (raw material) is not tenable. Further, as the Appellant have discharged the Central Excise duty on the final product manufactured out of the alleged raw material. If the department is of the opinion that the alleged goods was not received by the appellant then it is the onus on the department to prove that any other alternative raw material was used in the final products, Department has failed to do so. 4.2 We observed that for confirmation of cenvat demand the learned Adjudicating Authority relied upon the admission of Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers. Indeed, without examination of the person as required under Section 9D and opinion formed as mandated under the law, the statement recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality in placing reliance upon the statement of Director Narayan Prasad Tekriwal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly stated that the goods have been delivered to the appellant. We find that the appellant have recorded the receipt of the goods in their raw material account i.e. RG-23A-Pt. I and Pt. II and the said disputed inputs used in the manufacture of dutiable goods. It is also not the case of the department that the appellant have procured some unaccounted inputs to cover up the quantity of input shown in the invoices. There is no evidence that the inputs shown in the invoices received by the appellant were not used in the manufacture of final product. Department has not disputed the correctness of quantity manufactured by the appellant recorded in their daily stock account. There is no allegation by the department regarding the financial flow back that against the invoices for which the payments were made through cheque, any cash payment was received by the appellant. It is further noticed that nothing objectionable has been mentioned in the panchnama of search dated 21-01-2011 at the factory premises of Appellant in respect of the stock of finished goods/inputs. Nothing has been brought on record to show as to how Appellant produced their final products in the event of not having re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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