Tribunal grants appeal, awards consequential benefits. Appellant's evidence outweighs third-party statements.

The Tribunal allowed the appeals, set aside the impugned order, and held that the appellant was entitled to consequential benefits in accordance with law. The appellant had sufficiently established the receipt of inputs along with duty-paying documents, and the Department's reliance on third-party statements without cross-examination was deemed insufficient to prove the allegations.

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Issues Involved:
1. Whether the Cenvat credit availed on the invoices of the dealer for inputs was rightly taken.
2. Whether the show cause notice was barred by time.
3. Whether the appellant received the goods physically.
4. Whether the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944 is applicable.
5. Whether the statements of third parties without cross-examination are admissible.

Issue-wise Detailed Analysis:

1. Whether the Cenvat credit availed on the invoices of the dealer for inputs was rightly taken:
The appellant, M/s Reliable Industries, availed Cenvat credit based on invoices from dealers. The Department alleged that these invoices were issued without the physical delivery of goods, based on statements from Shri Amit Gupta and other transporters. The Tribunal found that the appellant had received the goods along with the Cenvatable invoices, entered them in RG-23A Part-I and II registers, and made payments through proper banking channels. The appellant also manufactured finished goods and cleared them on payment of duty, which was recorded in ER-1 returns. The Tribunal concluded that the appellant had sufficiently established the receipt of inputs along with duty-paying documents, thus taking credit under the scheme of the Act and Rules.

2. Whether the show cause notice was barred by time:
The appellant argued that the show cause notice issued for the period prior to 04.08.2011 was barred by time as it was issued after five years from the date of the transaction, beyond the extended period of limitation as per Section 11A(4) of the Central Excise Act, 1944. The Tribunal noted that the appellant had been filing monthly returns regularly, and the Department had failed to establish suppression of facts or fraud within the normal period of one year. Hence, the extended period of limitation was not applicable.

3. Whether the appellant received the goods physically:
The appellant maintained that they received the goods physically, which were duly accounted for in their records. The Tribunal observed that no physical verification of stock was done, and no shortage of physical stock was identified. The Department's case was primarily based on statements from third parties, which were not corroborated with any other evidence. The Tribunal held that the appellant had demonstrated the receipt of goods and their subsequent use in manufacturing finished products.

4. Whether the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944 is applicable:
The Tribunal cited precedents, including the case of CCE, Jaipur vs. Pushp Enterprises, where it was held that when the assessee is filing returns regularly, it does not amount to suppression of facts. The Tribunal concluded that since there was no positive mis-declaration by the appellant and the facts were declared in the monthly returns, the extended period of limitation was not invokable.

5. Whether the statements of third parties without cross-examination are admissible:
The Department's case relied heavily on the statements of Shri Amit Gupta and other transporters. However, the Tribunal noted that no cross-examination of these witnesses was provided to the appellant. One of the witnesses, Shri Sanjeev Maggu, retracted his earlier statement. The Tribunal emphasized that the appellant's transactions were recorded in their books of accounts and inventory records, and the Department did not make any inquiry from the appellant's customers. The Tribunal held that the case made out by the Department was not sustainable legally on facts and in the eyes of law.

Conclusion:
The Tribunal allowed the appeals, set aside the impugned order, and held that the appellant was entitled to consequential benefits in accordance with law. The Tribunal emphasized that the appellant had established the receipt of inputs along with duty-paying documents, and the Department's reliance on third-party statements without cross-examination was insufficient to prove the allegations.

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