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TMI Blog2023 (7) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... ightly ignored the statements of such persons for arriving at a conclusion that the order passed by the adjudicating authority was liable to be set aside. The adjudicating authority had also placed reliance upon the testing report/opinion given by one Dr. K. Prakalathan, Manager (Testing), CIPET, Chennai regarding the inputs used for manufacturing of the energy meters, the samples of which were sent to him for the purpose of testing. The adjudicating authority had observed that it was revealed from the report of the CIPET Chennai that the samples of energy meters were manufactured with polycarbonate only. It is relevant to mention here that the report of the Manager (Testing) as such has not been produced on record but it is revealed from the order passed by the adjudicating authority that the expert had opined that the mixing of polycarbonate with non polar plastic granules like granules of polymers of ethylene (PE), granules of polymers of propylene (PP) or granules of polymers of styrene (PS) was difficult. The Tribunal had observed that this report could not be considered to be conclusive on the point that the body part of energy meter could not be manufactured by mixing pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... K.Joshi, Senior Standing Counsel. For the Respondent(s) : Mr. Puneet Bali, Senior Advocate, with Mr. Surjeet Bhadu, Advocate, Mr. Sachin Jain, Advocate and Mr. Vishavjeet, Advocate,. RITU BAHRI , J. 1. This common judgment shall dispose of the above mentioned two appeals, which have been filed under Section 35 G of the Central Excise Act, 1944 (for short Act, 1944 ) seeking setting aside of common final order dated 03.12.2019 (Annexure A-2), received on 11.12.2019, passed by Customs, Excise and Services Tax Appellate Tribunal, Chandigarh Bench (for short Tribunal ) in Appeal No. E/60940/2019 (in CEA No. 4 of 2022) and Appeal No. E/61024/2019 (in CEA No. 5 of 2022). However, for facility of reference, the facts are being taken from CEA No. 4 of 2022. 2. Briefly narrated, the relevant facts of the case are that the assessee Company namely, M/s Avon Meters Private Limited is engaged in the manufacture of Energy Meters. It has been availing CENVAT Credit in terms of provisions of CENVAT Credit Rules, 2004 (for short Rules, 2004 ). On 11.02.2015, on the basis of an information received qua large scale evasion of Central Excise Duty by the assessee, its premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible on the goods which were found in the stock of the respondent-assessee as it had not been ascertained whether such goods were inputs of the respondent-assessee or not. It had wrongly observed that it was not the case of the revenue that there was any shortage of inputs though it was specifically alleged in the show cause notice that there was shortage of 6949.900 kgs of BOPET film. No entries qua the specific raw material were found to be made in the stock register of the respondent which proved that it had camouflaged the actual receipt and use of plastic granules of different varities. The respondent had not shown stock of wires and cables though it was shown to be purchased by it. Fraudulent paper transactions were proved to have been made. The revenue had not only relied upon the statements of the officials of the assessee but also suppliers, buyers and transporters which proved that the respondent-assesse had been indulged in bogus transactions and had been availing cenvat credit on goods which were not actually purchased. The learned Tribunal committed a grave error by holding that the statements of different persons could not be taken into consideration as the revenue h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd buyers of the respondent-assessee had not been supplied to it nor opportunity to cross-examine such persons had been provided to the assessee despite request being made and, therefore, principles of natural justice were violated by the revenue. The revenue and the adjudicating authority had wrongly concluded that the goods qua which cenvat credit had been claimed by it had not been received by it. He further argued that the information received from the expert from CIPET Chennai, regarding feasibility of mixing of polycarbonate granules with granules of polymers etc. was not conclusive and as the expert had also opined that polycarbonate could be mixed up with granules of polymers of ethylene (PE), granules of polymers of propylene (PP) or granules of polymers of styrene (PS). He further argued that the goods qua which cenvat credit had been claimed by the respondent-assessee were proved to have been passed through Information Collection Centres (for short ICC ) of the State of Punjab at different points of time but this fact had been ignored by the adjudicating authority. It was further argued that the revenue had failed to produce any material on record to show that the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of the final product and goods used for providing free warranty for final products; or (iii) all goods used for generation of electricity or steam [or pumping of water] for captive use; or (iv) all goods used for providing any [output service, or]; (v) all capital goods which have a value upto ten thousand rupees per piece. 8. Rule 4 of the Rules, 2004 is also relevant as per which the cenvat credit in respect of the inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output services or in the premises of job worker, in case goods are sent directly to the job worker on the direction of the manufacturer. 9. The claim of the respondent assessee is that it had been purchasing inputs which are different forms of plastic granules for the purpose of manufacturing of energy meters and its allied products and had actually purchased and used these inptus whereas according to the appellant from the statements given by the suppliers of these inputs, it stood proved that no such inputs had infact been purchased by the respondent assessee and only paper transactions had been done. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the revenue had chosen to heavily rely upon the statements of such persons, therefore, it was for the revenue to make such persons available for cross-examination for their evidence or statements to be considered and as it was not done so, therefore, in our considered opinion, the learned Tribunal had rightly ignored the statements of such persons for arriving at a conclusion that the order passed by the adjudicating authority was liable to be set aside. 10. Proceeding further, the adjudicating authority had also placed reliance upon the testing report/opinion given by one Dr. K. Prakalathan, Manager (Testing), CIPET, Chennai regarding the inputs used for manufacturing of the energy meters, the samples of which were sent to him for the purpose of testing. The adjudicating authority had observed that it was revealed from the report of the CIPET Chennai that the samples of energy meters were manufactured with polycarbonate only. It is relevant to mention here that the report of the Manager (Testing) as such has not been produced on record but it is revealed from the order passed by the adjudicating authority that the expert had opined that the mixing of polycarbonate with non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence had rightly not been relied upon by the Tribunal. The revenue failed to produce any material on record to show that either the goods qua which invoices were issued by the suppliers had been diverted to some third party or there was any instance of the money being received back in cash by the assessee as shown to be paid on account of purchase of the disputed inputs. The appellant-revenue had also failed to ascertain as to how much quantity of the inputs was required for manufacturing finished goods which were found at the time of the search. The Tribunal analyzing the material placed on record before it had found that the appellant had failed to prove that the inputs in question were not utilized by the respondent assessee for manufacturing of final product. The dispute which has been raised by the appellant before us is purely of facts and no substantial question of law can be stated to be involved in the same. It is well settled that in an appeal under Section 35 G of the Act, 1944, this Court cannot re-appreciate the evidence and conclude that the finding of fact is incorrect so the appeal can only be maintained on the substantial question of law. Since the findings recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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