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TMI Blog2024 (7) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... stigating agency presumes that against such payment the appellant have returned the money to ship breaking unit but to support this allegation, there is not a single evidence to show that the appellant has returned the money in cash to the supplier as this allegation is not substantiated by the investigation. It is found that under a common investigation relying on the same evidences and statements under the common alleged modus operandi show cause notices were issued to various other firms whose cases are on the same pedestal as the same present appellants. It is found that under a common investigation relying on the same evidences and statements under the common alleged modus operandi show cause notices were issued to various other firms whose cases are on the same pedestal as the same present appellants. In one of the case of C.C.E S.T. Silvasa vs. Vishal Casteels [ 2024 (1) TMI 881 - CESTAT AHMEDABAD] this Tribunal has dismissed the Revenue s appeal, upholding the adjudication order whereby, in an identical case demand was set aside. It can be seen that in the present case as well as the case above a common investigation was conducted and same evidences were relied upon such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alang and Sosiya. b) Availment of CENVAT Credit without actual receipt of inputs. The investigation relied on statements of Brokers, statements/letters of the owners of transport vehicles, Statements of Ship breakers etc. 1.2 Based on the above investigation, Show Cause Notice dated 04.06.2012 was issued to demand and recover CENVAT Credit amounting to Rs.1,41,14,953/-(Rule 14 of CCR, 2004 r/w Section 11A (1) of the CEA, 1944)along with interest (Rule 14 of CCR, 2004 r/w Sec. 11AB of the CEA, 1944) and penalty (Rule 25 of CCR, 2004 r/w Sec. 11AC of the CEA, 1944). SCN also proposed penalty on Shri Gordhandass Agarwal, partner of the Appellant (Rule 26(2) of CCR, 2004 r/w Rule 15 of the CCR, 2004). An addendum dated 08.03.2013 to the SCN dated 04.06.2012 was issued to the Appellant on 13.12.2016 wherein new additions, omissions modifications etc. were done in some paragraphs and statements of some Ship Breakers were includedas additional evidence. After due process of law, the Additional Commissioner of Central Excise, Customs Service Tax, Valsad Commissionerate vide Order-in-Original No. C. Ex./22/DEM/ADJ/CSM-ADC/VLS/2016-17 dated 31.3.2017 confirmed the demand raised in SCN. An ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence on record that the appellants had received back the amounts on account of the fact that no goods were consigned to them covered in the alleged invoice.Neither the statement of the ship breaking scrap manufacturers nor the brokers mention the details of the payment as well as how the payment was routed back to the appellants.No where there is any evidence by way of admittal in statements either neither by the representatives of the Appellants, nor by any supplier of so-called unaccounted scrap alleged to have been purchased by the Appellant. 2.3 Appellants were engaged in manufacturing M.S.Ingots during the subject period wherein electricity was consumed.In the absence of any evidence to the contrary, the confirmation of demand merely based on assumptions and presumptions needs to be set aside. There is no adverse report on the consumption of electricity, manufacture of excisable goods, payment of appropriate duty and non-receipt of the excisable goods cleared by the Appellants.Appellants had submitted all their statutory records for the period covered in the impugned order viz., purchase as well as sales register which has not been taken into consideration. The records submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of any statement the examination in chief and thereafter, cross examination of the witnesses must be given under Section 9(D) which is reproduced below:- 9D. Relevancy of statements under certain circumstances. (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains,-- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case then how the appellant have arranged the goods in substitution of the inputs covered under the Cenvatable goods. Similarly, the value of the alleged non receipt of goods comes to Rs.9,18,55,528/-, against such a huge amount if the appellant indulge into the modus operandi as alleged by the DGCEI atleast a tip of such a huge amount could have been detected to show that the appellant have returned the money in cash to the supplier but they failed to bring anything on record for the simple reason that there is no evidence in this regard. It is also not disputed that at the time of clearance of goods by suppliers i.e. ship breakers the goods have been loaded in the trucks and the duty paying invoices were issued. This also supports the case of the appellant that the goods were supplied which were received by them in the factory. In view of this undisputed position, the department could not establish that the appellant have not received the inputs covered under the invoices on which Cenvat Credit were availed. 4.3 At this stage without discussing much on the entire investigation of the present case, we find that under a common investigation relying on the same evidences and stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period April 2006 to March 2010. After completion of the investigation, show cause notices were issued to the respondent seeking to recover the Cenvat credit under Rule 14 of the Cenvat Credit Rules, 2004 read with with proviso to Section 11A(1) of the Central Excise Act, 1944, to impose penalty under Rule 15 of the Cenvat Credit Rules 2004 read with Section 11AC of the Central Excise Act, 1944. The notice also proposed penal action against the dealers/brokers/ who allegedly connived with the respondent in the fraudulent availment of CENVAT credit. The said notice was adjudicated vide impugned order and demand was dropped by the Ld. Adjudicating authority. Aggrieved from the same, the revenue is in appeal before us. 2. Shri Ashok Thanvi, Learned Superintendent (AR), assailed the impugned order by reiterating the grounds of the appeal and submits that all the statements of Ship Breakers of the Alang/Sosiyo/ transporters/ vehicle owners/ scrap brokers/ scrap traders/ and persons of the respondent were recorded voluntarily and without any threat, coercion or fear. There is nothing on record to prove that these statements were recorded under threat, coercion or fear. 2.1 He al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not acceptable as no documentary evidence has been put by Shri MinazNiyani like payment to the vehicle owners, booking register, bhadachitthi, toll slip, weighment slip etc. The retraction of Shri MinazNiyani is not legal. He placed reliance on the decision reported in 2017(346) ELT 477 (Tri. Mumbai) in the case of D.M Mehta Bros Vs. Commissioner of Customs (General), Mumbai. 2.4 He also submits that the deposition made by Shri Vikas Gupta, Scrap Broker and Pro. Of M/s Yes Roadlines during the cross examination regarding the question of vehicle owners of M/s Yes Roadlines etc. contrary to his statement, is nothing but an after-thought, as he does not give any documentary evidence for his transport frim like booking registers, delivery challan, advance payment of driver, name and address of the vehicle owners, bhadachitthi, broker payment etc., if he has hired the vehicle. The submission made by Shri Pawan Agarwal, Shri Samir Thakkar, and other scrap broker in the cross examination on various dates are similar and stereotype. This suggest that these versions made by them during the course of cross examination is an after-thought and appears to be made with ulterior motives and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal. 3. Shri J.C. Patel Learned Counsel with Shri Rahul Gajera, learned advocate for the respondents, defended the impugned order by reiterating the findings of the Ld. Commissioner. 3.1 He also submits that the present appeal is not maintainable in law since the review order dated 19.07.2017 by the Committee of Chief Commissioner directing filing of the present appeal has been passed after the lapse of the period of three months provided in Section 35E(3) of the Central Excise Act 1944 and there is no order of the board under the proviso to Section 35E (3) granting extension of time. In the present case, the Commissioner s order is dated 28.03.2017 and it was issued on the same date i.e 28.03.2017. In the form of appeal filed by the department, no other date of communication is mentioned and in fact in Sr. No. 2 against the date of communication, it is mentioned -------(dash). The date of communication is therefore to be taken as 28.03.2017. Since the order under Section 35E (1) has been passed on 19.07.2017 after the 3 months from 28.03.2017 and there is no extension of time granted by the Board, the same has been passed beyond the time limit provided in Section 35E (3) and acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010. The very fact that no such cash was found itself demolishes the reliance placed on the said loose papers containing some handwritten figures. Such rough records recovered during the search cannot by themselves establish the case of the department in absence of there being corroborative evidence. In the present case there is no such corroborative evidence in the form of seizure of cash. He placed reliance on the decisions of tribunal in the case of Arya Fibres Pvt. Ltd. Vs. CCE- 2014(311)ELT 529. 3.6 He also submits that there is absolutely no evidence in support of the allegation that in place of the Ship breaking scrap, the Respondent used local non-duty paid bazar scrap consisting of old and used household articles. However in the absence of such evidence, the case of the department that duty paid inputs had been diverted cannot stand. The show cause notice has placed reliance on the hand written scrap receipt notes recovered during the search, which as per the statement of the said Mr. Pravat Mallik was for scrap received and used to manufacture unaccounted MS Ingots. However, the present show cause notice is not in respect of any unaccounted manufacture of MS Ingots and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oices were received from the Ship-breaking units and no goods were received. In view of such inconsistency and contradiction in his statement, no reliance can be placed on such statement to draw any adverse inference against the respondents. Further, the said Minaz, apart from retracting his first statement, has in his cross-examination, not stood by his statements and on the contrary maintained in his cross examination that the goods covered by every invoice sold through him as Broker, were in fact supplied to the respondent and payment for the same was made by the Respondent through Bank. 3.10 He also submits that likewise, the other Broker, Vikas Gupta, Samir Thakkar and Pawan Agarwal have, in their cross examination all maintained that goods sold through them by the Ship breaking units had in fact been supplied and transported to the Respondent. 3.11 He placed reliance on the following decisions in which it is held that where witnesses whose statements are recorded by the department, have in their cross-examination not supported the department s case , such statements cannot be relied upon to confirm the demand:- Shri JaminUdayThakore Ors Vs. CCE- 2018(1)TMI 49 CESTAT Mumbai (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions in detail and perused the records. The case of the Revenue for denial of credit is that the Ship-breaking Scrap cleared by the Ship-breaking units under Cenvat Invoices on which the Respondent took credit was diverted and supplied by the Ship-breaking units to Re-rolling units and that the payment made by the Respondent by cheque/ RTGS to the Ship-Breaking units for the purchase of Ship-breaking scrap was returned by the Ship-breaking units in cash through anagdias after retaining the Ship-breaker s commission and further that in place of the ship breaking scrap, the respondent used local non-duty paid bazar scrap. To arrive at this, the department has relied on the statements of brokers i.e Shri MianzAsagarliNayani, Shri Vikas Gupta, Shri Pawan Agarwal and Shri Sameer Thakkar ; statements of transporters; statements of owner of vehicles ; and loose papers/ sheets /documents resume from the common office of M/s Vishal Casteels, M/s Vishal Engineering, M/s JalaramIsaptPvt. Ltd. and Ankur Traders, Vapi ; statement of Shri PrabhatMullick, Accountant who was working as accountant to all above firms and statement of Shri Ankur S. Thakkar. 4.1 We have examined all the contentions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Mumbai) it was held that burden to prove non-receipt of the inputs is required to be discharged by Revenue by sufficient evidence. Where disputed consignments are entered in RG-23A Part I and Part II in chronological order, the allegations of non-receipt of the inputs cannot be upheld. 4.4 In view therefore, we do not find any fault with the discussions and the view taken by the Ld. Commissioner in regard to the issue of alleged fraudulent availment of Cenvat credit. 4.5 We also find that in the whole matter department has relied upon third party records and statements. The Cenvat demand alleging fraudulent availment of Cenvat credit on strength of invoices without receiving inputs cannot be sustainable solely based on statements of third party and their records. The Ship Breakers Units and dealers no where admitted that they have not supplied the goods to the respondent. Respondent also produced documentary evidences in respect of receipt of inputs, use thereof in manufacture of final product, statutory records showing manufacture and clearance of final product on payment of duty, the receipt of inputs cannot be doubted. Since the Revenue failed to prove alternative source of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in the case of Gurpreet Rubber Industries v. CCE reported in 1996 (82) E.L.T. 347 it has been held:- Demand cannot be sustained only on basis of a private diary without considering production capacity, raw material purchased, labour employed, power consumed, etc. At the most it may raise a doubt but that cannot take place of proof. There is a long distance between may be true and must be true and the whole distance must be covered by legally reliable and un-matchable evidence. In another decision reported in Kashmir Vanaspati (P) Ltd. v. CCE - 1989 (39) E.L.T. 655 (CEGAT) it has been held that the Demand based on note book maintained by labourers containing un-authenticated entries cannot be sustained, unless the same is supported by other evidence, such as raw material consumed, goods actually manufactured, packed, etc. 4.7 In the present matter no corroborative evidence was provided by Revenue. We are of the view that the findings arrived at by the Ld. Commissioner in the present matter are appropriate and do not require any interference. 4.8 We also noticed that in the case of Motabhai Iron Ispat Indus. v. Commissioner of Central Excise - 2014 (302) E.L.T. 69 (affirmed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration v. CCE, Delhi - 2009 (237) E.L.T. 175 (Tri.-Del.) as also from the Tribunal s decision in case of M/s. Shree Jagdamba Castings (P) Ltd. v. CCE, Bhopal, 2006 (206) E.L.T. 695 (Tri.-Del.). It has been held in said judgments that the credit availed on the basis of invoices issued by the registered dealer, cannot be denied on the ground that the transporters have admitted the fact of non-transportation of the goods and the addresses of truck owners were found to be fake. 5. For all the above reasons, we find no merit in the appeal of Revenue, therefore the impugned order is upheld and the appeal filed by the Revenue is dismissed. Accordingly, cross objections are also disposed of. 4.4 From the facts of the above decision, it can be seen that in the present case as well as the case above a common investigation was conducted and same evidences were relied upon such as statements of brokers, transporters and ship breakers. Therefore, the ratio of the above decision is directly applicable in the facts of the present case. Considering the finding of the above decision and also the facts and circumstances of the present case, we are of the view that the Revenue could not establish t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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