TaxTMI 
TaxTMI 
2015 (7) TMI 497
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....or of the Respondent No.1 and Respondent No.3 is the Managing Director of a different manufacturing unit/company namely M/s.Signet Overseas Ltd., Indore. The Respondent No.1 is also availing the facility of cenvat credit o duty paid on inputs & Capital goods as per the provisions of Cenvat Credit Rules, 2004. 2.2 The officers of DGCEI, Regional Unit, Indore acting upon an intelligence that a number of manufacturing units/company namely, M/s.Signet Overseas Ltd., M/s.Kamdeep Marketing Pvt.Ltd., and M/s.Saurabh Marketing Agency [M/s.SOL,M/s.KMPL& M/s.SMA respectively, for act of brevity] & others had been issuing bogus cenvatable invoices of various plastic polymers to various manufacturers of plastic products, while selling plastic polymers in cash to other buyers without issuing any invoices, thereby enabling several manufacturers of plastic products to fraudulently availed cenvat credit on the strength of only invoices without receipt of duty paid inputs, conducted searches on 06.12.2007 at the following premises:- 1. Office premises of M/s SOL and its associate companies namely M/s KMPL M/s SMA, M/s SPET & M/s LPP. All office premises are situated at Indore; 2. Factory a....
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....ount of Rs. 20,00,000/- depicted on the right side of the slip was paid in cash to the Appellant No. 1. The transaction in the aforesaid lap-top also indicated cash payment of Rs. 20,00,000/- made to Respondent No. 1. The documents seized from the residence of Shri Pingle contained evidences regarding procurement of duty paid inputs and buyers of whom the duty paid inputs were actually sold. These documents indicated that M/s SOL and its other associates had sold the duty paid polymers to different buyers without issuing any invoice. 2.5 In his statement dated 6.12.07 recorded by the DGCEI Officers, the Respondent No. 3 had stated- that M/s SOL had been purchasing plastic polymers i.e. HDPE/LDPE/LLDPE granules etc. from M/s Haldia Petochemicals Ltd. Kolkata, M/s DCW Ltd. Shahaupuram and M/s South Asia Petrochemicals Ltd. Haldia. He stated that M/s SOL, registered as a first stage dealer with the Central Excise Department, had been selling these polymers to various industrial users. He further disclosed that the case transactions in above referred handwritten papers denote case receipts and cash payments made by M/s SOL which were not reflected in their official books of accounts....
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.... been purchasing material from M/s SOL. He stated that the payment to transporter is made either by them or trough suppliers. On being shown the statement of owners of vehicles shown to have been used in transportation of PVC resigns under invoices issued by m/s.SOL to the Respondent No.1, he refused to comment and simply stated that they have received material against the said invoices. He also refused to comment on being shown the printout taken from laptop from the premises of M/s.SOL and its employees which has been confirmed by the appellant no.3 as being correct and true. To sum up, cenvat credit of Rs. 43,02,028/- (including cess) was found by the departmental officers to be wrongly availed by the appellant No.1 without receipt of the goods in their factory. This act of the Appellant no.1 with support of appellant No.2 and No.3 appeared to be tantamount as wilful suppression of facts, mis-declaration and contravention of the relevant provisions of Central Excise Act, 1944, Central Excise Rules, 2002 and Cenvat Credit Rules, 2004 with sole intent to evade payment of Central Excise duty. As such, all the three appellants were appeared to render themselves liable for appropriat....
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....) Statements of some of the owners of vehicles (shown to have been used for transportation of goods form M/s.SOL and associates to respondent No.1, in which they denied to have transported any goods from M/s.SOL to the premises of respondent No.1. (viii) Statement of the respondent No.2 the managing director of the respondent No.1 wherein he denied to have purchased or received any material from M/s.SOL. 5. She further submits that the Commissioner (Appeals) has not appreciated the fact that the investigation revealed that the respondent No.1 took the credit without receipt of goods. It is also revealed that from the investigation that the supplier of the goods did not supply the goods to the respondent No.1. From the evidence, it is proved that goods have not been received by the respondent No.1 and the respondent No.1 made entries only in the accounts to show receipt of goods. She further submits that making entry in the statutory records does not prove that teh goods were received in the premises of the respondent no.1 when documents recovered by the department from the premises of Shri Ravindra Pingle and Shri Kirti Kala clearly show that out of 154 invoices issued by M/s....
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....gnet Overseas Ltd., M/s.Kamdeep Marketing Pvt.Ltd., and M/s.Saurabh Marketing Agency [M/s.SOL,M/s.KMPL& M/s.SMA respectively, for act of brevity] & others had been issuing bogus cenvatable invoices of various plastic polymers to various manufacturers of plastic products, while selling plastic polymers in cash to other buyers without issuing any invoices, thereby enabling several manufacturers of plastic products to fraudulently availed cenvat credit on the strength of only invoices without receipt of duty paid inputs, conducted searches on 06.12.2007 at the following premises:- 7. Office premises of M/s SOL and its associate companies namely M/s KMPL M/s SMA, M/s SPET & M/s LPP. All office premises are situated at Indore; 8. Factory and godown premises of M/s LPP. 9. Residential premises of Shri Mukesh Sangla (Appellant No. 3), Managing Director of M/s SOL and the authorized signatory or the proprietor of associate companies viz. M/s KMPL, M/s SMA, M/s SPET & M/s LPP; 10. Residential premises of Shri Kirti Mahesh chandra Kala, Cashier of M/s SOL & aforesaid associate companies; 11. Residential premises of Shri Ravindra Pingle, godown keeper of M/s SOL & aforesaid ass....
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....her associates had sold the duty paid polymers to different buyers without issuing any invoice. 7.5 In his statement dated 6.12.07 recorded by the DGCEI Officers, the respondent No. 3 had stated- that M/s SOL had been purchasing plastic polymers i.e. HDPE/LDPE/LLDPE granules etc. from M/s Haldia Petochemicals Ltd. Kolkata, M/s DCW Ltd. Shahaupuram and M/s South Asia Petrochemicals Ltd. Haldia. He stated that M/s SOL, registered as a first stage dealer with the Central Excise Department, had been selling these polymers to various industrial users. He further disclosed that the case transactions in above referred handwritten papers denote case receipts and cash payments made by M/s SOL which were not reflected in their official books of accounts. Scrutiny of ledgers on Shri Kala s Laptop in respect of transactions pertaining to the respodnent no. 1 had revealed that the transactions collectively covered the elements viz. (i) payment in case (ii) receipt by cheques & (iii) VAT, in his statement dated 18.02.09 of Shri Kirti Kala recorded by the DGCEI Officer, Shri Kala had stated that they supplied invoices of polymers to the respondent No. 1 without actually supplying the goods as ....
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....o the Respondent No. 1 revealed that they had never transported any goods from M/s SOL to the Respondent No. 1 and such vehicles were never attached to Blue Bird Transport Corporation / Bombay Goods Freight Cargo. Further, Statement of the Respondent No. 2 was recorded on 15.12.07 wherein he stated that they had never purchased / received any quantity of PVC resin or any other material from M/s SOL and they only procured certain invoices from them for which they had made payment by cheques to them and taken back equal amount of cash from the Appellant No. 3. On the strength of such bogus of fake invoices they had availed cenvat credit. The Respondent No. 1 had cleared excisable goods manufactured by them after payment of duty from inadmissible credit, thus such goods were cleared by them without payment of appropriate duty. In such a way, the cenvat credit amounting to Rs. 35,51,805/- was wrongly availed by the Respondent No. 1 without receipt of goods in their factory. This act of the Appellant No. 1 with support of the Respondent No. 2 & 3 appeared to be tantamount as willful suppression of facts, mis-declaration and contravention of the relevant provisions of Central Excise Act,....
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.... (x) Statement dt.18.2.09 of Sh. Kirti Kala, cashier of SOL about retaining VAT amount. (xi) Statement dt.26.2.2009 of Shri Mukesh Sangla clarifying why sale not mentioned in ledger of M/s.Parag Pentachem. (xii) Transactions pertaining to M/s.Parag Pentachem on Kala s ledgers during the period 1.10.05 to 5.12.2007. (xiii) Evidence relating to consignments invoiced by manufacturer to M/s.Parag Petrochem but received at Indore depot of M/s.SOL and associates. (xiv) Search of factory of M/s.Parag Petrochem, recovery of 25 invoices showing receipt of goods but goods dispatch/sale not corroborated in the ledgers in laptop of Kala an depot records. (xv) Statement of some of the owners of vehicles (shown to have used for transportation of goods from M/s SOL & associates to Appellant No. 1, in which they denied to have transported any goods from M/s SOL to premises of Respondent No. 1. (xvi) Statement of Proprietor of M/s BGFC and M/s BBTC in which he admitted that he had provided bogus L.R. @ 100/- per L.R. without providing for any truck for transportation to M/s SOL and M/s KMPL. (xvii) Statement of the Respondent No. 2 the Managing Director of the Respondent No. ....
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....afterthought to avail illegal benefit and to mislead the department. 12. He further submits that as per the decision of the Tribunal in the case of CCE, Mumbai-IV vs. Champion Confectionary-2010 (262) ELT 865 (Tri.-Mum.) wherein it has been held that retraction of any statement should be made to authority before whom statements were given, thus, it is between the giver of the statement and person before whom the statement was given. He also relied on the decision of the Tribunal in the case of Mahesh Kumar Goyel vs. CCE, Calcutta-II-2004 (177) ELT 561 ((Tri-Kolkata) to say that merely retraction without any evidence of duress or coercion do not deflect from evidentiary value of statements, especially if facts stated therein are corroborated by other evidence. 13. He submits that the appellant authority failed to take into account the hand written slips and entries made in the laptop of Shri Kala showing the receipt of payment in cheques and same being returned in cash to the respondent No.1. He further submits that the owners of the vehicle have also denied to have provided any vehicle for transport of the goods from the premises of M/s.SOL to the respondent No.1. They have a....
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....d in the regular course of business but in personal capacity and were provided the documents have no connection with the respondent No.1. Third party document seized, does not show that to whom the cash amount was received and by whom the said amount was given. Shri Kirti Kala did not claim any person, therefore, reliance cannot be placed upon the documents/seized from the residential premises from Shri Kirti Kala, employee of M/s.SOL and the same has not been corroborated any tangible evidence. No incriminating documents/records were found in the premises of respondent No.1. It is further submits that evidence relied upon are recovered from the persons associated with M/s.SOL. Therefore, as per decision of Apex Court in the case of CBI vs. V.C.Shukla- AIR SC 1406, the demand cannot be sustained on the basis of these records. 16. He further submits that the same investigation was conducted against M/s.Narmada Extrusion Ltd. wherein the same set of evidences has been relied on and the Commissioner (Appeals) have set asdie the demand vide Order-in-Original No.IND/CEX/000/APP/80 & 81/2013 dt.21.2.2013 and the said order has been accepted by the Revenue. No appeal has been filed aga....
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.... by charging Rs. 100 for each bilty and on the statement of 3 vehicle owners and out 32, who refused to have transported the goods. The said allegation is not sustainable. From his statement, it can be seen that he issued the bilties only when he talked to the driver of the vehicle for which he charged commissions of Rs. 100/-. This clearly shows that the goods were transported from godown of M/s.SOL to the respondent No.1 and the statement has been deliberately misinterpreted by the Revenue. The Revenue has relied upon the statement of owners stating that they did not transport the goods. It can be seen that when the vehicles numbers are genuine and except the statement of the owners then the statements of the owners have no evidentiary value as the vehicles were driven by the drivers. To support this, he relied upon the decision of the Tribunal in the case of CCE, Ludhiana vs. Parmatma Jatinder Singh Alloys P.Ltd.-2011 (266) ELT 67 (Tri.) in the case of Monarch Metals Pvt.Ltd.-2010 (261) ELT 508 (Tri.-Ahmd.). There is no other documents or record to prove that the allegation of Revenue that the credit was availed without the receipt of the goods by the respondent No.1. There is n....
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....mount of cash shown in those documents pertained to whom and to whom the cash payment was received and the said entries have not been corroborated by any independent tangible evidence. Therefore, the said evidence cannot be relied upon as admissible piece of evidence being third party record in view of the case of CBI vs.V.C.Shukla wherein the Apex court in para 34 and 39 has observed as under:- 34. The retionale behind admissibility of parties books of account as evidence is that the regularity of habit, the difficulty of falsification and the fair certainty of ultimate detection give them in a sufficient degree a probability of trustworthiness (Wigmore on evidence ? 1546). Since, however, an element of self interest and partisanship of the entrant to make a person behind whose back and without whose knowledge the entry is made liable cannot be rules out the additional safeguard of insistence upon other independent evidence to fasten him with such liability, has been provided for in Section 34 by incorporating the words such statements shall not alone be sufficient to charge any person with liability . 39. A conspectus of the above decisions makes it evident that....
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....ot be confirmed solely on the basis of note books maintained by some workers. The facts in the case of Aswin Vanaspati Industries would be identical to the facts herein as in that case also the allegation was with regard to removal of Vanaspati based on the inputs maintained. The Tribunal went in great detail and have clearly laid down that unless department produces evidence, which should be clinching, in the nature of purchase of inputs and sale of the final product demands cannot be confirmed based on some note books. A similar view was expressed by the Tribunal in the other judgments noted supra. The citations placed would directly apply to the facts of this case. Hence, following the ratio of the cited judgments, the assessee s appeal is allowed. 23. In the case of Rhino Rubbers Pvt.Ltd. (supra) again this Tribunal has held observed as under: "Goods not sufficient to prove clandestine manufacture and removal to have been purchased by one Mr. Augustin on behalf of the manufacturer - Such person not traced by the authorities nor his statement recorded - Manufacturer disowning the purchase of the raw material from the third party- Third party s records also showing names of....
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....facturer shall procure inputs from Delhi without cover of invoice to cover those purchases shall procure the invoices from Indore. Possibly, the Revenue has not made any enquiry from Delhi Market in respect of statement of Shri Karni Singh Kothari to ascertain the truth. Moreover, no statement has been recorded from the transporter in order to ascertain that the goods have been procured without cover of invoice from the Delhi market. The statement has not been supported with tangible evidence, the same cannot be relied upon in view of the decision of Hon ble Allahabad High Court in Vikram Cement Pvt.Ltd.. Another evidence relied upon by the Revenue is the statement of the transporter. Shri Vishal Agarwal, proprietor M/s. BGFC and authorised signatory of M/s. BBTC has stated that they have issued LRs to M/s.SOL by charging Rs. 100 for each bilty and on the statement of 3 vehicle owners and out 32, who refused to have transported the goods. From the statement of Shri Vishal Agarwal, it is clear that he has issued bilty only when talked to the driver of vehicle for which he charged Rs. 100/-. Therefore, the statement has been misinterpreted by the investigating authority to allege tha....