Tribunal allows appeal by M/s BSPL, rejects appeal by M/s A.G. International.

M/s Bhupinder Steel Pvt. Ltd. Versus Commissioner of Central Excise, Delhi-IV AND Vice-Versa

M/s Bhupinder Steel Pvt. Ltd. Versus Commissioner of Central Excise, Delhi-IV AND Vice-Versa - TMI Issues Involved:
1. Confirmation of duty demand and imposition of penalty against M/s BSPL.
2. Allegation of non-receipt of inputs by M/s BSPL.
3. Denial of cross-examination of witnesses.
4. Dropping of demand and penalty against M/s A.G. International.
5. Contradictory stand taken by Revenue before Settlement Commission.

Issue-wise Detailed Analysis:

1. Confirmation of Duty Demand and Imposition of Penalty Against M/s BSPL:
The Commissioner confirmed the demand of duty amounting to Rs. 1,35,58,394/- against M/s BSPL along with interest and imposed an equivalent penalty under Rule 13 of CCR, 2002, Rule 15 of CCR, 2004, Rule 25 of CER, 2002, and Section 11AC of the Central Excise Act, 1944. The basis for this was the allegation that M/s BSPL had availed Cenvat credit on invoices without actual receipt of inputs. The adjudicating authority relied heavily on statements from various transporters and officials from M/s HSAL, which indicated that no materials were transported to M/s BSPL. However, the Tribunal found that the adjudicating authority did not allow cross-examination of these witnesses, which was a violation of principles of natural justice.

2. Allegation of Non-receipt of Inputs by M/s BSPL:
The Revenue alleged that M/s BSPL availed Cenvat credit based on invoices without receiving the actual inputs. The Tribunal noted that M/s BSPL had entered the raw materials in their statutory records and utilized them in the manufacture of their final products, which were cleared on payment of duty. The Tribunal found that the Revenue failed to provide any evidence of alternative procurement of raw materials by M/s BSPL, which was essential to support their allegations. Additionally, documentary evidence like invoices stamped by sales tax authorities indicated the movement of goods, contradicting the transporters' statements.

3. Denial of Cross-examination of Witnesses:
The Tribunal emphasized that the denial of cross-examination of witnesses whose statements were relied upon by the Revenue was a significant violation of the principles of natural justice. The Tribunal referred to various judicial precedents, including the judgments in the cases of Kuber Tobacco India Ltd. and Ambika International, which mandated that statements recorded during investigations should be subjected to cross-examination if they are to be relied upon. The Tribunal concluded that the adjudicating authority's reliance on these statements without allowing cross-examination was not justified.

4. Dropping of Demand and Penalty Against M/s A.G. International:
The Commissioner dropped the demand of Rs. 1,10,87,137/- against M/s BSPL concerning the non-receipt of various inputs like Ferro Manganese, Ferro Silicon Lumps, etc., due to a lack of evidence. Similarly, the penal proceedings against the directors of M/s BSPL and M/s A.G. International were dropped. The Revenue's appeal against the non-imposition of penalty on M/s A.G. International was rejected by the Tribunal, which upheld the Commissioner's decision.

5. Contradictory Stand Taken by Revenue Before Settlement Commission:
The Tribunal noted that the Revenue had taken a contradictory stand before the Settlement Commission, where they argued that M/s HSAL had actually manufactured and cleared AS/MS products, and the duty paid on these products could not be neutralized against the duty liability on clandestinely cleared SS flats. This stand was accepted by the Settlement Commission, which directed M/s HSAL to pay the entire duty on the clandestinely cleared flats. The Tribunal found this contradictory stand by the Revenue to be unconvincing and detrimental to their case against M/s BSPL.

Conclusion:
The Tribunal allowed the appeal filed by M/s BSPL, setting aside the impugned order and providing consequential relief. The appeal filed by the Revenue against the non-imposition of penalty on M/s A.G. International was rejected. The Tribunal's decision was based on the failure of the Revenue to provide cross-examination of witnesses, lack of evidence supporting the allegations of non-receipt of inputs, and the contradictory stand taken by the Revenue before the Settlement Commission.