Tribunal rules in favor on Cenvat credit issue but confirms penalty for clandestine removal. Buyers' duty payments adjust appeal outcome.

The tribunal ruled in favor of the appellant regarding the denial of Cenvat credit due to lack of corroborative evidence supporting the revenue's claim. However, the tribunal confirmed the demand for clandestine removal of goods based on loose slips found in possession of the director, reducing the penalty by 25% under Section 11AC of the Act. The buyers admitted to paying duty on the received goods despite discrepancies, leading to the adjustment of deposits against duty and interest payable, ultimately disposing of the appeal with these terms.

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Issues:
1. Denial of cenvat credit based on alleged issuance of bogus invoices.
2. Allegation of clandestine removal of goods.

Analysis:
1. Denial of Cenvat Credit:
The appellant was accused of availing cenvat credit based on invoices without receiving the actual goods. The dealers' statements during the investigation claimed they issued only invoices, casting doubt on the transportation capacity of the mentioned trucks. However, the appellant contested this, arguing that the dealers' statements were coerced and that the trucks were indeed capable of transporting goods. As there was no corroborative evidence supporting the revenue's claim, the tribunal found in favor of the appellant. The lack of evidence regarding the alleged trucks and the contested dealer statements led to the dismissal of the demand for denial of cenvat credit.

2. Clearance of Goods Clandestinely:
The appellant faced allegations of clandestine removal of goods based on loose slips found in the possession of the director. The director failed to provide a satisfactory explanation for these slips, claiming they were not in his handwriting. Additionally, cross-examination of the buyers was not allowed. Despite discrepancies between the loose slips and the buyers' statements, the buyers admitted to paying duty on the received goods. Due to the lack of a clear correlation and the partial payment of deposits before the show cause notice, the tribunal confirmed the demand for clandestine removal but reduced the penalty under Section 11AC of the Act by 25%. The tribunal also ordered the adjustment of the deposits against the duty and interest payable. Consequently, the appeal was disposed of with these terms.

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