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TMI Blog2024 (11) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods as no excise paid challan or invoice has been issued by appellant No.1. During the course of investigation, statement of the Authorized Representative of the appellant No.3 was recorded and nowhere he has admitted that they are having any relation or have ever transacted with appellant No.1 and the goods which have been received by them have been used in manufacturing of their final product, which ultimately suffered duty. These facts are not in dispute. In the absence of all the evidences it cannot be said that appellant No.3 has not received the goods. Moreover, the case against the appellant No.2 and 3 has been made on the basis of statement of appellant No.1. Demand cannot be raised on the basis of third party statement without any corroborative evidence thereon. The cenvat credit in this case cannot be denied to the appellant No.3, therefore, no penalty can be imposed on the appellant No.2. Consequent to that, penalty on the appellant No.1 also cannot be imposed. The impugned order is set aside - appeal allowed. - HON BLE SHRI ASHOK JINDAL , MEMBER ( JUDICIAL ) Shri S.P. Majumdar, Advocate for Appellant Shri Satya Narayan Dey and Shri Arijit Chakraborty, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containers by one time lock (OTL) provided by CONCOR to M/s. City Road Lines; he procured the consignments of Pig Iron on behalf of the downstream manufacuturers from the factory of the supplier-manufacturers; lifted the same to the places other than the factory of such downstream manufacturers by arranging the containers from CONCOR, loading the same in the containers received from CONCOR and sealing through his agent, preparing fake invoices and road challans for safe transportation upto CONCOR TERMINAL by means of Heavy Vehicles (vehicles having platforms only) commonly known as trailers wherefrom such loaded containers were dismounted from the trailers and remounted on the platform of the railway rakes / wagons by special type of crane known as Reach-stackers for onward transportation by Indian Railway and, he maintained the details of the consignments of Pig iron lifted by him in the exercise book seized under Seizure Sl.No.04/SSI/OFF/09 in very systematic manner according to the delivery order (D.O.) issued by the supplier-manufacturer of Pig Iron before clearance of the same from the factory. 2.3 Statement of the appellant Shri Satyanarayan Dey was also recorded under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs.1,50,000/- on 14.05.2009 was found maintained at Page-2 of said the diary / note-book. Shir Dey stated that the Left Hand Side of demarcation line appearing on each page of diary / note book represents the cash receipt and the Right Hand Side represents cash disbursement. Shri Dey also stated that to derive the actual amount of cash receipt and disbursement, the decimal point was to be ignored. Therefore, the amount of Rs.2000.00 shown against A.M Transport Corporation on 12.05.2009 would mean cash disbursement of Rs.2,00,000/- and the amount of Rs.1500.00 shown against A.M. Transport Corporation on 15.05.2009 would mean cash disbursement of Rs.1,50,000/-. 2.6 Investigation was also conducted at the end of M/s. City Road Lines 2.7 Investigation was also carried out at the end of CONCOR, Kolkata. 2.8 Further, investigation was conducted at the end of the supplier- manufacturers of Pig Iron namely M/s Rashmi Metaliks LImtied, Gokulpur, PO-Shyamraipur, Dist: Paschim Medinipur, West Bengal. In the statement tendered on 13.9.2012 under Section 14 of CEA, 1944, Shri Rajesh Kumar Singh the Manager of M/s. Rashmi Metaliks Limited, inter-alia confirmed that all the consignments o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gi the Director of M/s. Sampoorna Logistic Pvt.Ltd. in a written statement tendered on 10.6.2013 under Section 14 of CEA, 1944, inter- alia stated that they never transported any goods in trailer using the service of container. Shri Dilip Kumar Saraogi also confirmed that the vehicles having registration no. WB 41C-6315 and WB 23-9797 used for consignments of Pig Iron under Central Excise invoices no. 1101 dated 5.8.2008 respectively were not at all arranged by M/s. Sampoorna Logistic Pvt.Ltd. Shri Rabindra Nath Bera-the authroised representative of the appellant-company in his statement, although, contended that they have made payment to M/s. Samporna Logistics Pvt.Ltd. for transporting the consignments of Pig Iron from the factory of its supplier to the factory of M/s. Surya Alloy Industries Ltd. (appellant No.3), but failed to produce any documents evidence showing payments and calculation of service tax liability on the exact amount of transport charges paid to M/s. Sampoorna Logisties Pvt.Ltd. in respect of such consignments of Pig Iron. 2.15 It appeared to have established the fact that the transactions shown to have made between M/s. Sampoorna Logistics Pvt.Ltd. and the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Central Excise invoices no.1101 and 1104 both dated 5.8.2008 and transported in containers from the factory of M/s. Rashmi Metaliks Limited. The appellant No.3 received only Central Excise invoices issued by the supplier-manufacturer M/s. Rashmi Metaliks Limited against such consignments of Pig Iron. Shri Satyanarayan Dey-the appellant No.1 lifted those consignments of Pig iron to his customers at Delhi or other places. Shri Satyanarayan Dey- the appellant No.1 recorded the particulars of such consignments of Pig Iron in Page no.153 of the exercise book seized vide seizure Sl.no.04/SSI/OFF/09. Some of the particulars recorded in Page 153 of the exercise book seized vide Seizure Sl.no.04/SSI/OFF/09 were found recorded in Page no.27 of another exercise book seized under Seizure Sl.No.07/SSI/OFF/09. The exercise book seized vide Seizure Sl.no.07/SSI/OFF/09 contained the container number which was mounted on the vehicle registration number of which was mentioned against such container number. Since, those vehicles were open body vehicles (platform type), the consignments of Pig Iron were loaded in the containers mounted on it for transportation from the loading point to the CONCOR te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation and manipulation of documents; lifted the entire consignments of Pig Iron without actually supplying the materials covered under the Central Excise invoices to the appellant No.3 and facilitated and abetted the appellant No.3 to make false and fraudulent claim of procurement of Pig Iron in their factory premises and to avail the benefit of wrongful Cenvat credit, penalty upon the appellant No.1 was also proposed to impose under Rule 26 of the Central Excise Rules, 2002 read with Rule 15 of the Cenvat Credit Rules, 2004. 4. The show cause notice dated 27.09.2013 was adjudicated by the lower adjudicating authority vide the impugned order wherein he (i) disallowed Cenvat Credit amounting to Rs.19,52,468/- (Total of Cenvat duty and cess) in terms of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A(10) and order for recovery of the same from the appellant No.3 under Section 11A(4)] of the Central Excise Act, 1944, (ii) ordered for recovery of interest I terms of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA (erstwhile Section 11AB) of the Central excise Act, 1944, (iii) imposed equal amount of penalty of Rs.19,52,468/- upon the appellant No.3 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is alleged that the present appellant company was availing Cenvat Credit of so diverted Pig Iron without actual receipt of the goods from such suppliers 8. That from the SCN it would be evident that from the alleged private records of said Satyanarayan Dey, the investigating authority identified two consignments under Invoice Nos. 1101 and 11049 both dated 05.08.2008 as issued by M/s. Rashmi Metaliks Limited for the respective supplies of 27.5 MT of each Pig Iron to the appellant company herein. Accordingly, at Annexure-L to SCN details of said two consignments were reflected. However, at Annexure-M other input consignments of the appellant company for the period from 08.07.2008 to 10.08.2008 from M/s. Rashmi Metaliks Limited and M/s Neo Metaliks Limited have been considered also as diverted consignments and accordingly, at Annexure-C to SCN, duty totalling to Rs. 19,52,468/- has been calculated on such total consignment of 430 MT of Pig Iron and has been alleged to be irregular availment of Cenvat Credit by the appellant company during such period. 9. It is submitted that during the course of investigation, Rabindranath Bera, Authorized Representative of the appellant company i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pig Iron, were not genuine transactions in nature and/or there was any flow back of money. The documents produced by the appellant with regard to receipt of goods could not be controverted by the authority. There is no statement admitting the allegation or in corroboration of the allegation. The entire allegation is presumptive in nature, which has no validity in law. Reliance, in support of the contentions above, is placed upon the following decisions : a) A.K. Multimetals v. Commr. of C.Ex. ST, Chandigarh-I [2015 (323) ELT 591 (Tri.-Del.)] b) Motabhai Iron Steel Industries v. Commr. of C.Ex. [2014 (302) ELT 69 (Tri.-Ahmd.)] c) Commissioner v. Motabhai Iron Steel Industries [2015 (316) ELT 374 (Guj.)] d) Royal Industries v. Commr. of C.Ex., Chandigarh-I [2016 (342) ELT 135 (Tri.-Chan.)] e) Commr. of C.Ex., Indore v. Prag Pentachem Pvt.Ltd. [2018 (360) ELT 1025 (Tri.-Del.)] 12. It is submitted that since the Revenue has miserably failed to discharge their burden of proof and/or to corroborate the allegation of non-receipt of inputs by the appellant company, demand of Cenvat Credit together with interest and/or imposition of penalty in this regard is liable to be set aside and quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No.3 was recorded and nowhere he has admitted that they are having any relation or have ever transacted with appellant No.1 and the goods which have been received by them have been used in manufacturing of their final product, which ultimately suffered duty. These facts are not in dispute. In this set of facts during the course of investigation, the Revenue has failed to investigate whether during the course of investigation, the goods shown as purchased by the appellant No.3 were lying in their physical stock or not? Moreover, if these goods were not used by appellant No.3 in manufacturing of the final product from where the goods were procured and how the payment thereon was made, what was the mode of transportation of those goods? In the absence of all these evidences it cannot be said that appellant No.3 has not received the goods. Moreover, the case against the appellant No.2 and 3 has been made on the basis of statement of appellant No.1. Demand cannot be raised on the basis of third party statement without any corroborative evidence thereon. 18. In that circumstances, I am of the considered view that cenvat credit in this case cannot be denied to the appellant No.3, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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