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TMI Blog2024 (6) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further it is also found that there is no other corroborative evidence to establish that the shortage was on account of short-receipt of raw material. In that circumstances, we hold that the investigation was conducted by the Revenue is deficient and incomplete. In that circumstances, the charge of shortage of inputs stands disproved. CENVAT Credit - HELD THAT:- There is no evidence, that the shortage of inputs are due to diversion of inputs or theft of the inputs or clandestine clearances of inputs. When there is no finding that the inputs on which credit has been taken were clandestinely removed/ diverted what remains is improper accounting of the inputs. For improper accounting the cenvat credit cannot be demanded. In these circumstances, there is no evidence to sustain a finding that this is a case of irregular or incorrect taking or utilisation of credit. In such a situation, no cenvat demand is sustainable under Rule 14 of Cenvat Credit Rules, 2004. Admissibility of evidences - HELD THAT:- Statements recorded during investigation in the present matter, whose makers are not examination-in-chief before the adjudicating authority, would have to be eschewed from evidence, and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit demand as proposed in the show cause notice was confirmed and penalties were imposed on all the appellants. Against the said order, the appellants are before us. 2. Shri Saurabh Dixit, the Learned Counsel appearing on behalf of the appellants submits that appellant has introduced SAR ERP system somewhere in May 2012 in their premises. As is common knowledge, implementing SAP ERP system is a time consuming and confusing job. It was felt that whenever production process was undertaken on concurrent basis prior to as well as after SAP implementation during its initial phase, the consumption of raw materials was not properly recorded as issued for production as it should be. This necessitated taking actual stock of the goods available and update the SAP data so as to reflect the correct position for effective use of the SAP ERP system. Appellant has been in the business of the production of cranes and material handling equipment for the last past 50 years. When the material is procured and stores, the same can have minor variations in weight and quantity. So much so, when it is issued for production, again it is done so on approximate basis. At times there are minor variations tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 069- CESTAT AHMEDABAD. Jain Garni Marno Pvt. Ltd.- 2024 (2) TMI -318 CESTAT AHMEDABAD. 2.3 He also argued that in any case, onus to first prove that the appellant had in fact availed Cenvat Credit on inputs, is upon revenue to discharge, which is not done so at all in the present case. In absence of first proving that the goods were cenvatted, even if they are converted into scrap (or assumed to be stolen in the present case), not demand on this count can be raised since revenue failed to prove that it was cenvatted. He placed reliance on the following decisions:- L T Ltd. 2008 (228) ELT 294 (Tri-Mumbai) Banswara Textile Mills Ltd. 2005 (183) ELT 318 (Tri-Del) GSFC Ltd. 2019 (9) TMI 669 CESTAT AHMEDABAD 2.4 He further submits that the onus to prove that there was actually shortage of inputs before they were put to use, and the same were removed from the factory in clandestine manner, is upon revenue. He placed reliance on the following decisions:- Indian Polypipes and others Vs. Commissioner, Central Excise, Kolkata I- 2003 (157) ELT 652 (Tri. Kolkata) Rishi Polymach Pvt. Ltd. -2010 (261) ELT 349 (Tri. Bang,) Panchmahal Steel Ltd. 2023 (12) TMI 434-CESTAT AHMEDABAD Krupalu Metals P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifying the demand involved on this count as well. The very fact that entire demand is quantified only on basis of SAP reconciliatory entries, and no demand is raised in Annexures to SCN on non receipt of input related issue at all ipso facto means that this issue anyway is academic as such. 2.9 He also submits that the impugned order at para 8 (vi) had refused to grant cross-examination of witnesses stating that paper credit was based of statements and hence, there is no need to cross examine any witness. That such statements which are not put to the test of cross-examination loose their evidentiary value in toto. The demand on this count therefore must be dropped. 2.10 He also submits that the statements of co-accused per se is not a solid evidence, but merely an assurance to the court, if anything. The same is not sufficient to bring home serious charge of clandestine clearance. He placed reliance on the following decisions:- Shakil Ahmed Khan 2019 (266) ELT 634 (All) Gobinda Das -2023 (385) ELT 722(Tri. Kolkata) Shri Krishna Industries -2020 (372 )ELT 121 (Tri. Ahmd) 3. On other hand, Shri Tara Prakash, Ld. Deputy Commissioner (AR) appearing for Revenue has supported the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials are not issued physically, however quantity and amount of such raw materials are recorded by entry 201 in SAP system to adjust the shortage or excess of raw materials. As far as SAP software program in concerned, 221 221Q is entry related to goods issued to project WBS (Work Break down Structure). 261 is entry where material is issued to production order and 261Q is entry related to goods issued to project production order. The meaning of abbreviation mentioned in the report of entry Nos. 221Q, 261 and 261Q are as same as given against the entry 201 202. The Ld. Commissioner has arrived at a conclusion that the raw material entry in said SAP system is all the raw material which is clandestinely removed by the appellant under the guise of cost centre. However but we noticed that the said SAP entry is done just to avoid the mal-functioning of SAP programme on actual basis as the shortage caused due to mis-handling of accounts cannot be entered into the SAP accounting at any later stage. It has to be accommodated in some other head which does not have a previous mention of the same entry. Further during the SAP ERP System was implemented, the appellant based on stock taking exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be demanded. In these circumstances, we are of the view that there is no evidence to sustain a finding that this is a case of irregular or incorrect taking or utilisation of credit. In such a situation, no cenvat demand is sustainable under Rule 14 of Cenvat Credit Rules, 2004. 4.4 We also find that the in the present matter it is also alleged by the department that Shri Hasmukbhai Patel, Proprietor of M/s. Kushal Steel and Karta of HUF namely Hasmuk C. Patel was making arrangement of Cenvatable invoices for the appellant without physical/actual sending the materials to the appellant. In his statement, Shri Hasmukhbhai patel admitted the said facts. He admitted that he had arranged 18 invoices of M/s San Enterprises and M/s Evershine Steel for about 235 MT. of MS Angle, Plate, Flats etc. We find that in support of their statements Shri Hasmukhbhai Patel nowhere produced any documentary evidences. Further he was not given the details of invoices to which period they belong. We also notice that appellant requested the Ld. Adjudicating authority for cross-examination of witnesses which are relied upon by the department. However the said request of the appellant was rejected. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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