9911796707
TMI Blog2024 (11) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... cility by adopting the modus operandi of non-receipt of their primary raw materials, namely Pig Iron in their factory and non- use of the same in the manufacture of final products. The said manufacturers were availing the benefit of CENVAT Credit only on the basis of invoices issued by the manufacturers of Pig Iron and utilizing such credit in discharging the duty liabilities on clearances of their final products. 2.1 On the basis of above said information, the DGCEI, KZU conducted search at the premises of M/s. Shyam Sons India wherein various incriminating documents were recovered and seized. 2.2 On examination of the documents seized from the premises of M/s. Shyam Sons India, it was observed that Shri Satyanarayan Dey - the appellant was the proprietor of M/s. Shyam Sons India; he was engaged in the trading business/Purchase & Sale of scraps and other steel products namely Pig Iron; he was conducting his trading business in a different manner viz. purchases and sale of Iron & Steel products in the name of M/s. Shyam Sons India, Purchase and Sale of Scraps & Steel material in the name of M/s. N.K.Loha Udyog and in the name of fake unit M/s. Patwari & Sons; he was also acting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying the goods, 4th Column represents the quantity, 5th column represent the total price of the goods and the last column represents the amount of VAT involved in the consignments; the name of the brokers who arranges the dealings with the downstream manufacturers availing CENVAT Credit facilities were also mentioned on the left hand top corner in abbreviated form; the date of invoice, name of the supplier-manufacturer, weight of the exercise book seized under Sl.No.04/SSI/OFF/09 were also recorded in the exercise book seized vide Seizure Sl.No.06/SSI/OFF/09, 07/SSI/OFF/09 and 08/SSI/OFF/09; the exercise books seize3d vide Seizure Sl.No.06/SSI/OFF/09, 07/SSI/OFF/09 and 08/SSI/OFF/09 also contain the container number and seal no. in the case of transportation made using the service of container and such container was mounted on the vehicles, registration no. of which was mentioned against such container number and, Shri Dey, the appellant in his statement narrated the details of transaction recorded in the documents recovered and seized from his office premises admitting his role played in diverting the consignments of Pig Iron procured against the invoices raised in the name of dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1985 availed Cenvat Credit on the basis of Central Excise invoices issued by M/s. Rashmi Metaliks Ltd. and M/s. Neo Metaliks Ltd., as recorded in page no. 143, 152 & 153 of exercise book seized under Seizure Sl.No.04/SSI/OFF/09, without actual receipt of the consignment of Pig Iron in their factory. 2.10 Accordingly, investigation was also carried out at the end of the appellant No.3. 2.11 The officers of the DGCEI, KZU collected/obtained the documents relevant and useful to the investigation from the appellant No.3 under summon proceedings. 2.12 Under investigation proceedings, the appellant No.3 was summoned wherein Shri Rabindra Nath Bera - the authorized representative of the appellant No.3 appeared and rendered his statement under section 14 of CEA, 1944. 1.13 Shri Ashish Rungta, the Managing Director of the appellant company (i.e. appellant No.2 herein) was also summoned during investigation and his statement was tendered under section 14 of CEA, 1944 wherein he, inter-alia, stated that he was overall responsible for all the activities of the appellant-company including purchase and sale. 2.14 As Shri Rabindra Nath Bera - the authorized representative of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the vehicles shown to have used for transporting such consignments from the factory of the supplier-manufacturer of Pig Iron under Central Excise invoice no.1101 and 1104 both dated 5.8.2008, neither M/.s Sampoorna Logistics Pvt.Ltd. nor the appellant No.3 (M/s. Surya Alloy Industries Ltd.) arranged the container and paid rent for the same. And therefore, it appeared tha the consignments of Pig Iron under investigation against which CENVAT Credit was availed by the appellant No.3 was not at all received in their factory for use in or in relation to the manufacture of final products. As such, it is the violation of Rule 4(10 of the CENVAT Credit Rules, 2004 which prescribes the condition that credit can be taken only upon receipt of the eligible input into the factory. 2.16 On the contrary, it appeared from the records made available from and M/s. National Carriers that in respect of transportation of the consignments of Pig Iron under Central Excise invoices bearing serial no.1101 and 1104 both dated 5.8.2008, the containers were supplied from CONCOR; Shri Vijay Singhania-Executive and Manager of M/s. National Carriers arranged the vehicles and the containers on receipt of paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... container number, out-time of the empty container from CONCOR terminal point, etc. were also mentioned in the documents/records collected from CONCOR. 2.18 It, thus appeared that the consignments of Pig iron apparently shown to have been received by the appellant-3 from the factory of M/s. Rashmi Metaliks Ltd. and M/s. Neo Metaliks Ltd. were only for availment of the benefit of CENVAT Credit and utilization thereof in an unauthorized and unlawful manner when the materials were actually diverted to the places other than the factory of the appellant No.3. 3. Accordingly, show cause notice dated 27.09.2013 was issued to the appellant No.1, appellant No.2 & appellant No.3, proposing the above said CENVAT credit to the disallowed and recovered from the appellant-3 along with interest in terms of Rule 14 of the CENVAT Credit Rules, 2004 read with proviso to Section 11A(1) [presently section 11A(4)] and Section 11AB [presently Section 11AA] of the Central Excise Act, 1944 and imposing penal action on the appellant No.3 under section 11AC of the Central Excise Act, 1944 read with Rule 15 of CENVAT Credit Rules, 2004. For the reasons that the appellant No.2 Shri Ashish Rungta as Managing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004. 5. Being aggrieved by the impugned order, the appellants filed appeal before the Ld.Commissioner(Appeals), who affirmed the adjudication order. Against the said order, the appellants are before me. 6. The Ld.Advocate appearing on behalf of appellant No.1 submits that firstly, Shri Satyanarayan Dey dealt with the Pig Iron that was admittedly Central Excise duty paid as well as VAT paid and thus was not liable for confiscation. Secondly, Shri Satyanarayan Dey, as an unregistered dealer of goods, had no obligation under the Central Excise laws or procedures. He sold the goods under the cover of his Firm's challans without central excise duty and thus his buyers did not avail any cenvat credit. Thirdly, having dealt with the goods, which did not contravene any provisions of Central Excise laws or procedures, merely for someone had availed irregular credit, Satyanarayan Dey who sold officially the goods under the cover of his Firm's Challans cannot be visited with penalty under Rule 26 of Central Excise Rules, 2002 read with Rule 15 of CENVAT Credit Rules, 2004. 7. The Ld.Advocate appearing on behalf of appellant No.2 & 3 submitted that the basis of the entire demand against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Limited. Shri Ashis Rungta, Managing Director of appellant company in his statement dated 23.07.2012 before the Investigating Authority has duly agreed to the statement of Rabindranath Bera. 10. It is submitted by the Ld.Advocate that apart from purported private records, as allegedly recovered from premises of said Satyanarayan Dey, there is nothing on record even to suggest that the consignments under question were not actually received by the appellant company. There was no investigation with M/s, Rashmi Metaliks Limited or M/s. Neo Metaliks Limited. Physical receipt of goods and transaction by the appellants through banking channel with their suppliers of Pig Iron during the said period of July, 2008 and August, 2008 have been duly established by the appellants by way of producing documentary evidences, which could not have been rebutted by the Investigating Authority. Further, the appellants vide their Reply dated 13.02.2014 had duly submitted before the Authority that in case of alleged non-receipt of 430 MT of Pig Iron during the period from 08.07.2008 to 10.08.2008 by the appellant company, they could not have maintained input-output ratio of their finished goods. They r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such non-available goods cannot arise. Further, neither Adjudication Order nor the impugned Appeal Order confiscates any excisable goods and as such, provision of Rule 26 is not imposable. Imposition of single penalty under two separate provisions of law is seriously bad in law. As such, penalty so imposed is liable to be set aside also. 14. In view of the above, it is submitted that there is no merit in the impugned order dated 14.12.2018 and accordingly, it is prayed that the same may kindly be set aside and quashed with consequential relief to the appellants. 15. The Ld. AR for the department reiterated the findings of the impugned order. 16. Heard the parties, considered the arguments advanced before me. 17. The sole issue in this case is that whether the appellant No.3 is entitled to take cenvat credit on the invoices issued by M/s. Rashmi Metaliks Ltd. and M/s. Neo Metaliks Ltd. or not? The case of the Revenue is that during investigation at the end of appellant No.1, the note books were recovered and in that note book name of appellant No.3 was found entered which will show that the appellant No.1 has received goods from the suppliers on behalf of appellant No.2 and 3 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
