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TMI Blog2024 (6) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... ong interpretation and the presumption alleging the Cenvat credit as inadmissible is held unsustainable in that circumstance. In Suzuki Synthetics Pvt. Ltd. [ 2014 (11) TMI 990 - CESTAT AHMEDABAD] , the Tribunal observed that if the case of clandestine removal is to be sustained based on private records then the same is required to be supported by corroborative evidence with regard to purchase of raw material, manufacture of final goods, flow-back of money or identification of the buyers and their statement, etc. The ratio laid down in the above mentioned judgments is squarely applicable to the present case also as there is no corroborative and tangible evidence adduced by the department establishing clandestine clearance/diversion of input material by the assessee except the presumption about the same. Violation of principles of natural justice - HELD THAT:- Though the department has taken the plea that there are three test reports which supports the department s contention but it is observed that there is no apparent denial to the fact that the three of the samples picked up by the department were of irregular shape and were not homogenous at all and as is mentioned in CRCL Repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by time - Appeal allowed. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri G.K. Sarkar and Shri Prashant Srivastava, Advocates for the Assessee Shri Rakesh Agarwal, Authorized Representative for the Respondent ORDER The present order disposes of two cross appeals arising out of the same Order-in-Original bearing No. 17/18-19 dated 13.08.2018. One of these appeals is filed by the assessee and another is filed by the department. The facts in brief culminating into these appeals are as follows: 1.1 Assessee are engaged in manufacture of S.S. Ingots and Alloy Ingots. They had diverted, as such, the Cenvatable inputs i.e copper ingots/scrap on which Cenvat credit had been availed under Cenvat credit Rules, 2004. The officer of Anti-evasion (Hqrs.), Central Excise Commissionerate, Jaipur-I had visited the factory premises of M/s. Kesri Steel Ltd., Bhiwadi on 25.02.2008. It was observed that S.S. Ingots and Alloys Ingots were being manufactured mainly by way of remelting of S.S. scrap already containing ingredients like magnesium, carbon, silicon, chromium, aluminum, cobalt, copper, nickel, sulphur etc. As per the various standards of manufacturing l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,902/-on M/s Kesri Steel Ltd., A-350, RIICO dustrial Area, Bhiwadi, under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 on M/s Kesri Steel Ltd, A-350, RIICO Industrial Area, Bhiwadi. (iv) However benefit of reduced penalty of 25% as per proviso to Section 11AC of Central Excise Act, 1944, is available to the assessee subject to the condition that the interest payable on demand of CENVAT credit of Rs. 12,06,902/- as in (i) above under Section 11AB ibid, is paid within thirty days from the date of communication of this order and further subject to the condition that the benefit of reduced penalty 25% of Rs. 12,06,902/- shall be available if the amount of penalty so determined has also been paid within the period of thirty days from the date of communication this order. 1.2 The manufacturer has challenged the order for the demand as confirmed, however, department simultaneously has challenged the order with respect to the demand over and above Rs.12,06,902/- which has been dropped. 2. We have heard Shri G.K. Sarkar and Shri Prashant Srivastava, learned Advocates for the assessee and Shri Rakesh Agarwal, learned Authorized Representative for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 to 25.02.2008 has been proposed vide the Show Cause Notice dated 12.10.2009. The appellant is duly registered and has been regularly filing the returns. No mis-declartion in his returns was ever noticed. The extended period has wrongly been invoked. Learned counsel has relied upon the following decisions: (i) Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur reported as 2013 (288) ELT 161 (SC) (ii) Commissioner of Customs, Central Excise Service Tax Vs. Monsanto Manufactures Pvt. Ltd. reported in 2014 (35) STR 177 (All.) Accordingly, the assessee s appeal is prayed to be allowed by setting aside the demand even of Rs.12,06,902/- and by setting aside the order of imposition of penalty. The appeal filed by the department is accordingly prayed to be dismissed. 4. While rebutting these submissions, learned Departmental Representative has mentioned that as per BIS norms, S.S. Steel/ Alloy Steel ranges between 0.0094 to 1.94%. However, from the test reports of sample recovered from assessee s laboratory, the percentage of copper was shown as 0.12 to 1.24%. The department had picked up three samples from the assessee s manufacturing unit and got those tested from CRCL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been availed on such inputs which were not consumed in terms of the test report of consumption of raw material in manufacture of final product. 5.2 To adjudicate further, we observe following to be the admitted facts: (i) During the course of search no unaccounted stock of raw material or finished goods or any cash etc. were found. (ii) No allegations of receipt of any unaccounted sale proceeds on part of the respondent-assessee. (iii) There is no investigation with respect to the buyers who would have purchased the clandestinely cleared copper from the assessee. (iv) There is no investigation with respect to the transportation of such clandestinely cleared input material/copper from the assessee s factories. (v) All the payments have been received and made by the assessee through proper banking channel. 5.3 These observed admitted facts are sufficient for us to hold that the allegations of clandestine removal of the final product of assessee are merely presumptive allegations. This Tribunal in Century Metal Recycling Pvt. Ltd. (supra) has held that when there is no documentary evidence of clandestine removal of raw material i.e. transport details, buyer details, financial tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence the said report dominates the three of the reports produced by the department. It is also very much apparent on record that the report of M/s.Nalwa Steels sample was not given to the assessee. It was not even made the relied upon document. This fact became the basis of remand. The adjudicating authority has duly considered the said report and accepted its contention. Department has failed to show any cogent reason of concealing the M/s. Nalwa steels sample report. The adjudicating authority itself has held that not informing the assessee about M/s. Nalws Steels sample test report clearly shows that show cause notice has relied upon the test reports which did not favour the assessee. Non disclosing the vital fact of the report which supports assessee is held to be the violation of principal of natural justice. 5.5 Despite accepting that the S.S. and Alloy ingots manufactured by assessee have 11.9% of copper, the original adjudicating authority has still confirmed the demand/reversal of Cenvat credit availed on 20.636 MT of copper ingots. The findings that the said amount of copper ingots have been diverted clandestinely without payment of duty have not discussed any evidence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession. Once there is no deliberate intention on part of the assessee not to disclose the correct information or to evade payment of duty, it was not open to central excise officer to precede recovered duties in the manner indicated in the proviso to Section 11A of the Act. In the above discussion, we have already held that the department has intentionally and wrongly concealed the correct test reports. In fact, the departmental adjudicating authority itself has appreciated the same while dropping the major part of demand. We have also concluded that the demand, whatsoever has wrongly been confirmed on the assessee. Clearly the present is not the case of suppression of facts or misrepresentation as is alleged. Accordingly, we hold that the extended period of limitation has wrongly been invoked. 6. As the result of entire above discussion, the order under challenge is though modified in terms of findings in Para 5.4 above. However, we hold that show cause notice itself is barred by time. Consequent thereto, the appeal filed by assessee is hereby allowed, however, the one filed by the department is hereby dismissed. [Order pronounced in the open court on 06.06.2024] - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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