Tribunal overturns CENVAT credit denial, stresses procedural fairness & cross-examination rights

The Tribunal set aside the impugned order denying CENVAT credit to the main appellant, emphasizing the importance of proper procedures and the opportunity for cross-examination as per Section 9D of the Central Excise Act, 1944. The Tribunal directed reconsideration by the adjudicating authority, highlighting the need to follow legal principles and precedents from higher courts in the absence of a judgment from the jurisdictional High Court of Gujarat. The matter was remanded for a fresh consideration, stressing adherence to principles of natural justice and directives of the High Court.

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Issues: Denial of CENVAT credit and non-granting of cross-examination

Denial of CENVAT credit:
The judgment pertains to two appeals challenging the denial of CENVAT credit to the main appellant by the Commissioner (Appeals), Central Excise & Customs, Vapi. The issue revolves around the appellant, M/s Siddhi Ferrous, allegedly not receiving any input, leading to penalties and demands with interest. The appellant's counsel argued that reliance on statements made by suppliers and dealers, where inputs were not documented but only CENVAT credit was availed, should not be accepted without the opportunity for cross-examination. The counsel cited precedents from the Hon'ble Punjab & Haryana High Court, emphasizing the importance of following proper procedures for statements relied upon by the revenue authorities. Since there were no corroborative evidences, the appellant sought to set aside the impugned order.

Non-granting of cross-examination:
The appellant's counsel contended that the lower authorities denied cross-examination of individuals whose statements were crucial for the case, as the suppliers and dealers did not appear for cross-examination despite it being granted once. On the other hand, the Additional Commissioner for the Revenue argued that the adjudicating authority had indeed allowed cross-examination, but the individuals failed to participate. The Revenue suggested that the matters be sent back for cross-examination to be conducted, and the department should not be penalized for the non-appearance of witnesses. The Tribunal, after considering both sides, acknowledged the need for reconsideration by the adjudicating authority. Referring to judgments from the Hon'ble High Court of Punjab & Haryana, the Tribunal emphasized the importance of following the law and procedures laid down in Section 9D of the Central Excise Act, 1944. The Tribunal highlighted that in the absence of a judgment from the jurisdictional High Court of Gujarat, decisions from other higher courts needed to be followed. Consequently, the Tribunal set aside the impugned order and remanded the matters to the adjudicating authority for a fresh consideration, emphasizing adherence to principles of natural justice and the directives of the Hon'ble High Court.

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