TaxTMI 
TaxTMI 
2013 (11) TMI 746
X X X X Extracts X X X X
X X X X Extracts X X X X
....Excise Rules, 2002 and Rule 15 of the Cenvat Credit Rules, 2004 have been imposed upon Shri Dilipbhai C. Jain, Vice President of the main appellant. Penalties of Rs. 5 Lakh, Rs. One lakh and Rs. 50,000/- have been imposed respectively upon Shri Kamlesh Manohar Kanoongo, Director of M/s. Sikkim Ferro Alloys Limited, Shri Praveen C. Jain Director of main appellant and Shri Omprakash Sharma, Proprietor of M/s. Carrier Corporation of India, Delhi, under Rule 26 of the Central Excise Rules, 2002. 2. Brief facts of the case are that the main appellant is manufacturer of S.S. Billets, S.S. Angles, S.S. Flats, S.S. Round Bars and S.S. Bright Bars etc. Appellants are holding one common Central Excise records for three premises and are maintaining common Central Excise records in one common premises. On the basis of intelligence that main appellant is indulging in clandestine removal of the finished goods, the officers of Central Excise conducted their search of all the premises of the appellant on 08.7.2006 and the residence of Shri Praveen C. Jain, vice President and also found shortage of certain finished goods on which duty involved was Rs. 12,43,861/-. The shortage was recorded durin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idavits for either not being present throughout the Panchnama period or that English was not known to them. (ii) That appellant requires Nickel for manufacture of different grades of SS Products where Nickel contents vary from 4.5 to 14% as per the requirement of the customers. That Nickel was purchased by the appellant from M/s. Metal Liner International Limited, New Delhi and M/s. Metal Traders (India) Private Limited, Delhi under nine bills of entry as follows:- S/ No B/E No./ Date Total duty availed as credit Transporter's Name LR No./ date Truck No. 1 499373/ 19.4.06 19,28,404/- Shree Rama Krishna Carrying Corpn. (Delhi) 16133/ 26.4.06 HR38/ L1756 2 512682/ 14.6.06 16,50,841/- Suraj Transport Roadways P. Ltd 15459/ 17.6.06 HR38/ K7694 3 509796/ 31.5.06 11,80,254/- Delite Cargo Carrier (Regd.) & Rajputana Transport Company 44766/ 19.6.06 & 701/ 13.6.06 HR38/ E0870 MH04/ AL6272 4 474719/ 20.12.06 6,40,607/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t credit of Rs. 11,80,254/- where the transporter is M/s. Delite Cargo Carriers. In this case, statements are favourable to the appellants and M/s. Rajputana Transport Company vide their letter dated 07.6.2006 has confirmed the vehicle had broken down and the goods were transported in another Lorry No. MH04AL-6272 from Bhiwandi to Umbergaon. (c) That B/E No. 474719 (cenvat credit of Rs. 6,40,607/-) demand is confirmed on the basis of statement of Shri Tanwinder Singh Dhody, Prop. Of M/s. Dhody Goods Carrier (pg. 443-436). There is a contradiction regarding place of delivery at Gulabi Baug at New Delhi, whereas Shri Qumruzzan Khan stated that the goods were delivered at Anand Parbat. (d) That appellants Director and vice President in their statement dated 05.9.2006, 01.12.2009, 09.7.2006 and 21.8.2006 have confirmed receipt of inputs. (e) That for B/E No. 502842 (Cenvat Credit of Rs. 18,89,822/-) and B/E No. 509803 (cenvat credit of Rs. 887935) transported M/s. Suraj Transport Roadways and Carrier Corporation of India, the show cause notice relied upon report received from transport Commissioner of Gujarat. However, as per information obtained under RTI by the appellant's ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ioner did not permit cross-examination of main witnesses i.e. Shri Om Prakash Sharma, Shri Mukesh Verma and Shri Arun Kumar B. Singh and authors of letter submitted by M/s. Delite Cargo Carriers and others, though he agreed and granted cross-examination of other witnesses, who were not important. As the entire case of non-receipt of duty paid inputs is based on statements of transporters whose cross-examination was not given by the learned Commissioner contrary to the ratio of the judgment of Allahabad High Court in the case of CCE, Meerut vs. Parmarth Iron Pvt. Limited reported in [2010 (260) ELT 514 (All.)], therefore, the learned Commissioner could not have relied upon the statement of transporters to confirm the demand raised against the appellants. Further, it is well settled law that the learned Commissioner could not have relied upon the statement of Shri Pravin Jain who in the same proceedings is co-noticee in the absence of any corroborative evidence as held by Hon'ble Supreme Court in the case of Mohte Sham Ismail reported in [2007 (220) ELT 3 (SC 7] (viii) That in view of the following case laws there is no evidence on records that Nickel was diverted and not received....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cers in the presence of appellants and appellant never raised any objection to the method of stock taking. Any representation made afterwards has to be considered only as an afterthought when the duty liability, worked out on the shortage of finished goods manufactured and cleared by the appellants, was voluntarily paid without protest. Duty demand of Rs. 12,43,861/- has, therefore, been correctly confirmed by the appellant along with imposing penalty equivalent to the duty involved. 5. The second issue is regarding admissibility of cenvat credit of Rs. 1,16,21,289/-, with respect to imported Nickel cathodes purchased by the main appellant on high sea sale basis which has been held by the adjudicating authority as not admissible. It is the case of the Revenue that Nickel cathodes were cleared from ICD, Tughlakabad and sold in and around Delhi and only cenvat credit was taken by the appellant on the basis of the bills of entry but no inputs were actually received in appellants factory. Revenue has relied upon the statement of CHA, local transporters engaged at Delhi, statements of the transporters engaged by the appellant etc. to bring home the point that Nickel cathodes were no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wed. 6. For the second line of investigation, with respect to the transporters engaged by the appellant, it was concluded by the adjudicating authority that the vehicles mentioned in the documents do not show the movements on the important check posts between Delhi and appellants factory and accordingly, held that inputs were never received in their factory. It was the argument of the advocate of the appellant that dates mentioned at the check posts by the concerned authority are not reliable. To bring out this point appellants advocate made us go through pages 222 to 232 of the appeal which is the information obtained under RTI from the State Public Information Officer, office of Transport Commission, Gandhinagar, Gujarat. It was his case that the vehicle number mentioned in the transport documents does not show the entries in the records of Transport Commissioner adjacent to the days when appellant received the consignments of Nickel cathode. It is observed from the information relied upon by appellant that very first vehicle No. DN-09-9568 during the period 25.5.2006 to 29.6.2006 is alternately showing as 'I' (in) or 'O' (out), but between 09.4.2006 to 23.5.2006 entries aga....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Revenue. 7.2 Learned advocate appearing on behalf of the appellants relied upon the following case laws and argued that jurisdictional High Court has already settled this issue in favour of the assessee:- (a) Commissioner vs. Dhanlaxmi Tubes & Metal Industries [2012 (282) ELT 206 (Guj.)] (b) Monarch Metals Private Limited vs. CCE Ahmd. [2010 (261) ELT 508 (Tri. Ahmd.)] 8. It is no doubt a settled law that Revenue need not establish an offence case with mathematical precision required in a criminal case but preponderance of probability is also sufficient in Revenues case. But it does not mean that creating a suspicion is sufficient to hold that preponderance of probability is in favour of the Revenue. In the present proceedings, there is no statement of any person confirming that imported Nickel cathode have been diverted or sold to any other person. For creating preponderance of probability also there should be some incriminating statement or document. For example, if the entire freight and purchase of goods were made by appellant in cash and transporters also confirm that no goods were transported. In the absence of these indicators, it cannot be said that prepo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-2008. Upon going through the lengthy show cause notice in its entirety, the Court finds that though on the face of it, it appears that ample evidence has been collected during the course of investigation, in fact, the evidence collected against the assessee is to the effect that the record of the transporters shows that the vehicles through which the copper ingots/wire scrap were stated to have been sent, had actually transported goods other than copper ingots/wire scraps to the manufacturers at Gujarat, Daman or Silvassa. The entire case of the Department is based on the record of the transporters without the support of any other evidence. The record indicates that there is no dispute that copper ingots purchased from units located at Jammu were transported by trucks from Jammu to Delhi. After trans-shipment at Delhi, they were shown to be transported from Delhi to the premises of M/s. Pranav Metal Mart, at Nadiad. According to M/s. Pranav Metal Mart, the goods so transported have in fact been received by it under proper invoices. It is also the say of M/s. Pranav Metal Mart that the goods were sold to the assessee and it is the case of the assessee that such goods were received ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee; there was no dispute that the LRs were issued by the transporter showing that the assessee is the consignee of the goods; the case of revenue was based on the goods registers maintained by the transporter which indicates the description of the goods as miscellaneous. According to the Tribunal, this fact, by itself, could not be held to be sufficient for arriving at the conclusion that the inputs were never transported to the assessee's factory. The Tribunal found as a matter of fact that all documentary evidence on record supported the assessee's case about the receipt of inputs, whereas there was no independent corroborative evidence produced on record by the revenue in support of its case. 8. From the facts noted hereinabove, it is apparent that the Tribunal has appreciated the facts of the present case in proper perspective and upon appreciating the evidence on record, has as a matter of fact, recorded that except for the goods registers maintained by the transporter, there is no other evidence on record to indicate that the assessee has in fact not received the goods in question. In the circumstances, in the absence of any evidence to the contrary being pointed o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts to manufacture a stainless steel product having Nickel content of more than 10%, then he has to use additional Nickel. That is precisely the document of metallurgist conveys that to supplement higher percentage of Nickel in the finished product appellant has used 334.917 MT of Nickel cathode and 1267.876MT of Ferro Nickel. Therefore, a finding of the adjudicating authority that no additional Nickel is required by the appellant is factually incorrect. It cannot be appreciated that when such large quantities of Nickel are required by the appellant, he will divert the Nickel purchased at Delhi for only to get cenvatable documents and fulfil his requirement of Nickel by procuring nickel from other sources without payment of duty to cover the cenvatable documents acquired by him. In view of the above observations and the fact that no Nickel was found short at the time of Stock taking by the visiting officers of Central Excise and no quantity of allegedly diverted. Nickel was seized anywhere in the proceedings, it cannot be appreciated that imported Nickel was diverted in and around Delhi. 12. In view of the above, it has to be held that cenvat credit with respect to imported Nicke....