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TMI Blog2024 (11) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of the aforesaid final products; and had availed the Cenvat credit on such imported inputs under the Cenvat Credit Rules. An intelligence collected by the officers of DGCEI indicate that Appellant instead of taking the imported inputs to their factory at Daman for use in or in relation to the manufacture of the final products, had diverted the imported inputs for sale in the market. However, they had taken/availed the benefit of Cenvat credit paid on such inputs on the strength of documents [i.e. on the Bills of Entry] only. The intelligence further indicated that Appellant engaged M/s. Pankaj Shipping & Transport Co. (hereinafter referred to as M/s. PSTC) as the Customs House Agent (CHA) for clearance of the imported goods from Port of import at Mumbai; and also as transporter of the said inputs from the Port of import to their works/factory at Daman. To cover-up the non-receipts of such inputs in the factory premises at daman, and to facilitate availment of Cenvat credit by Appellant, it appeared that Appellant prepared/got prepared forged transportation related documents for the inputs so diverted in connivance with M/s. PSTC and others. The intelligence further indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority has not provided copies of the relied upon documents to the appellant, despite such directions by the Hon'ble CESTAT and requests by the Appellant after the CESTAT directions. However, without receiving RUDs sought, Appellants have filed reply to SCN before the adjudicating authority vide letter dated 12.06.2024 objecting SCN on merits and various other grounds. However, vide impugned order, Ld. adjudicating authority has again confirmed demand without following the directions of the CESTAT. The impugned O-I-O dated 12-08- 2024, having not followed the directions of the Hon'ble CESTAT and mandatory judicial discipline, deserves to be set aside on this ground alone without even going into merits of the case. He placed reliance on the following judgments: - * RBF RIG Corporation, Mumbai Vs. Commissioner of Customs - 2011 (264) E.L.T. 486 (S.C.) * Triveni Chemicals Ltd. Vs. UOI - 2007 (207) E.L.T. 324 (S.C.) * Nipha Steel Ltd. Vs. CCE, Kolkata -IV - 2016 (342) E.L.T. 463 (TriKolkata) * Vishnu Kumar Traders (P) Ltd. Vs. CC, Chennai-IV 2019 (369) E.L.T. 1070 (Tri. - Chennai) * CCE Vs. Chandan Steel Ltd. - 2009 (238) E.L.T. 716 (Guj.) * Tribhuvandas Bhimji Zaveri V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thus, the entries made in the DLR/MLR do not prove that the container/ imported inputs were transported only up to the destination given in such DLR/MLR. It is not the entry in the DLR/MLR but the transportation charges which are relevant as these indicate the actual transportation. In fact an alternate route was available for transportation from Mumbai to Daman without Check Post/without RTO check post. 2.4 He also submits that the extract of DLR reproduced in Paragraph 13.3 of SCN does not refer to any consignment pertaining to Appellant. MLRs extract of PSTC captured in Paragraph 13.3 of SCN contains the details of delivery of imported inputs of Appellant to Daman against challan no. 1168. This clearly indicates that the inputs were delivered to Daman. He placed reliance on the decision of this Hon'ble CESTAT in identical case, in 2023 (385) E.L.T. 541 (Tri-Ahmd) - CCE, Daman vs Garg Industries Pvt. Ltd vide Final Order Nos. A/10443-10448/2023-WZB/AHD, dated 14-3-2023 in Appeal Nos E/10151/2020-(DB) with E/10146-10150/2020. 2.5 He also submits that the department's entire case on the assumptions that the appellant has taken Cenvat credit without actually receiving inputs in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri- Del). 2.8 He also submits that the adjudicating authority has relied upon statements which are retracted. The evidentiary value of these statements could be only when they have been admitted legally as evidence under section 9D of Central Excise Act. Having not admitted these evidences as required under section 9D of Central Excise Act 1944, O-I-O has not followed provisions and hence this O-I-O also deserves to be set aside. From the reading of the Section 9D ibid, it is clear that it is mandatory to provide the crossexamination of witnesses to appellant against whom the case of clandestine removal was proposed. Section 9D provides that the cross-examination is mandatory and after cross-examination of witnesses, the statements can be admitted as evidence to use against the appellants for adjudication of the show cause notice. It is not choice of Adjudicating Authority to grant or to deny cross examination. It is settled by decisions that without crossexamination of the witness their statements recorded under Section 14 of Central Excise Act, 1944 cannot be accepted and demand on that basis cannot be confirmed on such charges. Department in this case has not proved their ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 129 (Tri. - Del.) 2.10 On limitation he also argued that the show cause notice dated 07-01- 2009 is not sustainable on time limitation as the pre-requisite conditions and ingredients like fraud, collusion, willful misstatement or suppression of facts, with intent to evade payment of duty, for invoking extended period are not existing in the facts of this case, extended period for demand of duty is not available in terms of Section 11A of Central Excise Act, 1944. The question of invoking extended period of time limitation is a mixed question of facts and the law. Since Appellant have not suppressed any facts with intent to evade any duty, such SCN dt 07-01-2009 for demand issued for 2003 to 2006 is not sustainable on time limitation. The duty demand with interest, and penalties confirmed by the impugned O-I-O dated 12-08-2024 requires to be dropped on this ground of time limitation alone. He placed reliance on the following decisions:- * Cosmic Dye Chemical - 1995 (75)ELT 721 (SC) * CCE vs. H.M.M. Limited - 1995 (76) ELT 497 (SC) * Padmini Products- 1989 (43) ELT 195 (SC) * Tamil Nadu Housing Board vs CCE 1994 (74) E.L.T. 9 (SC) * CCE vs. Chemphar Drugs & Liniments -198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's letter dt. 21.10.2017 * Department's letter dt. 05.12.2017 * Appellant's letter dt. 20.12.2017 * Department's letter dt. 15.06.2018 * Appellant's letter dt. 26.06.2018 * Department's letter dt. 13.07.2018 * Department's letter dt. 10.08.2018 * Appellant's letter dt. 17.08.2018 * Appellant's letter dt. 10.09.2018 * Department's letter dt. 12.03.2019 * Appellant's letter dt. 26.03.2019 * Department's letter dt. 27. 03.2019 * Appellant's letter dt. 02.04.2019 * Appellant's letter dt. 16.04.2019 * Department's letter dt. 23.04.2019 4.1 On going through the above correspondence, we find that it is not only the correspondence between the appellant and DGCEI and the adjudicating authority but there are also number of letters written by the office of the adjudication authority to the DGCEI for supplying the required documents. This itself shows that the appellant have not been given all the relied upon documents at any point of time. Since, there is no dispute that the appellant were not supplied the relied upon document as mentioned by them, the adjudication should not have taken place in absence of providing the said documents to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department and thus became final. Therefore, it was not open for the Ld. Commissioner to pass the order ignoring the remand direction of their higher authorities and confirming the demand on the same grounds as taken in the first round which was set aside by the Tribunal. 4.2 We also find that the remand order of this tribunal duly accepted by the department. The department have not questioned the final order of the Tribunal dated 08.10.2021, which order has attained finality. We further find that in the case of RBF RIG Corporation, Mumbai v. Commissioner of Customs (Imports), Mumbai, (2011) 3 SCC 573 (Para-25) = 2011 (264) E.L.T. 486 (S.C.), Hon'ble Supreme Court laid down the law that if for any reason, the subordinate authority is of the view that the directions issued by the Court are contrary to statutory provision or well established principles of law, it can approach the same Court with necessary application/petition for clarification or modification or approach the superior forum for appropriate reliefs. Clearly, in the present case, the department have not questioned the final order of the Tribunal dated 08.10.2021. In such circumstance without providing the copy of reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o assessee despite repeated written requests - Request of Department to provide another opportunity, not grantable as more than 10 years lapsed since initiation of proceedings - Substantial question of law not arises - Section 35G of Central Excise Act, 1944 (ii) Further in the matter of Tribhuvandas Bhimji Zaveri v. CCE [1997 (92) E.L.T. 467 (S.C.)] supra - The Hon'ble Supreme Court has held that when relied upon documents are not furnished, the right to offer proper explanation is severely prejudiced. Failure to supply copies of documents has caused prejudice and the principles of natural justice are violated. Impugned order is set aside and appeals are allowed. (iii) In the matter of International Computer Ribbon Corpn. v. CCE [2004 (165) E.L.T. 186 (T)] - The Tribunal held that when directions given by the Tribunal for furnishing copies of the relied upon documents have not been complied with by the Revenue, there is violation of the terms of the remand order. The impugned order is set aside and appeal allowed. (iv) Similarly, in the matter of Union of India Vs. Lampo Computers (P) Ltd., 2014(305)ELT 214 supra the Ho'ble Karnataka High Court held that -Adjudication - Read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t crossed the said inter-state check-post as reflected from records maintained with RTO (Gujarat). Accordingly, CENVAT credit availed by Appellant on such diverted inputs appeared to irregular and not admissible. We find that contrary to this evidences/investigations the fact that the Appellant have recorded the receipt of the goods in their Raw materials account i.e. RG-23 Part-I and RG-23 PartII, the purchase of the imported goods under the Bills of Entry in question were booked in books of account. The Appellant has also shown the use of disputed inputs in their factory premises for manufacture of finished goods, further finished goods were cleared on payment of duty. Even the payment of transportation was also made by cheque. The Revenue could not bring any evidence that the goods covered under the disputed Bills of Entry were diverted to any other place. It is also not the case of the department that the Appellant have procured some unaccounted inputs/raw materials to cover up the quantity of imported input shown in the said Bills of Entry. Moreover in the present matter revenue could not find out any single buyer of the alleged diverted inputs and single alternative raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay not have been updated with the final destination. Thus, the entries made in the DLR/MLR do not prove that the container/ imported inputs were transported only up to the destination given in such DLR/MLR. It is not the entry in the DLR/MLR but the transportation charges which are relevant as these indicate the actual transportation. As observed the above, the veracity of the said documents recovered from the premises of the third party i.e. M/s PSTC, is not known. Hence, it cannot be the sole basis for alleging diversion of imported inputs by Appellant. Additionally, it is important to note that the basis of preparation of said documents has not been made available to the Appellant, therefore, it would be a miscarriage of justice if such unsubstantiated documents are used as evidence against the Appellant. We also find that said DLRs and MLRs are in the nature of rough records written by drivers and on the basis of such third-party records, no adverse inference can be drawn against Appellant. The unsigned, vague and general entries in private records maintained by the staff without corroboration from any tangible evidence cannot be relied upon to prove diversion more so when no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without goods - Evidence - Third party evidence - Revenue, inter alia, relying on written slops/entries of laptop seized from residence of cashier of dealer issuing invoices, alleging that these contain details of cash transaction in respect of goods not of business - The seized records therefore are third party records - Settled law in catena of decisions including that of Apex Court in 1998 AIR SC 1406 that third party records alone cannot be relied upon as admissible piece of evidence - Further, even in these records there is no identification of person to whom said alleged cash transaction belong - Said entries having not been corroborated by any independent evidence, not reliable - On same facts and investigations, credit allowed in respect of another party and no appeal filed against such order - Denial or credit on the basis of these entries not sustainable - Rule 3 of CENVAT Credit Rules, 2004. [paras 21, 22, 23, 24, 26]." 4.8 We have also gone through the judgments relied upon by the appellant in this context. In the said decisions it has been consistently held that demands of whatever nature cannot be confirmed solely on the basis of third party's evidence/records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances in which a statement recorded before a gazetted officer of Central Excise (under Section 14 of the Act) can be treated as relevant for the purposes of proving the truth of the contents thereof. Reliance is placed on the ruling of the Hon'ble Punjab & Haryana High Court in the case of Jindal Drugs (Infra), 2016 (340) E.L.T. 67 (P & H) wherein the Hon'ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for crossexamination by the other side/assessee. Such view has also been affirmed by the Hon'ble Supreme Court in the case of Andaman Timber (Infra) - 2015 (324) E.L.T. 641 (S.C.) = 2017 (50) S.T.R. 93 (S.C.). 4.12 We further find that Hon'ble Punjab & Haryana High Court in the case of Sukhwant Singh - (1995) 3 SCC 367 it has been observed as under :- "8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides : "138. Order of examinations. - Witnesses ..... 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