AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 372
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....ri Joit Kumar Jain. The following penalties have been imposed on the co-noticees as given in the table below:- S. No. Name of the co-noticee Amount of penalty imposed (in Rs.) 1 M/s. Annapurna Impex Pvt. Ltd-. 3,06,03,937/- 2 Navneet Agarwal, Managing Director of S. No. 1 above 3,06,03,937/- 3 M/s. Mardia Samyoung Capillary Tubes Co. Ltd. 70,48,480/- 4 M/s. Mardia Tubes Pvt. Ltd. 10,04,622/- 5 Ravindra Mardia, Managing Director of S.No. 3 above 80,53,102/- 6 Jay Wire & Conductors 5,17,445/- 7 Ramesh Ratilal Chauhan, Partner of S. No. 6 above 5,17,445/- 8 M/s. Deepak Glass & Plywoods 37,38,809/- 9 Ambalal Jain, Proprietor of S. No. 8 above 37,38,809/- 10 M/s. Uttam Glass Co. 9,91,379/- 11 Bhavarlal Jain, Prop. of S. No. 10 above 9,91,379/- 12 M/s. Lata Steels 6,45,875/- 13 Pawan Lata, Partner of S.No. 12 6,45,875/- 14 Shri Pravin Singh, Proprietor of M/s. Andhra Roadways Corporation 9,00,000/- 15 M/s. Gullchem Industries 50,00,000/- 16 Shri Narayan Walvalkar, Proprietor of S. No. 15 above 50,00,000/- Aggrieved of the sa....
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....penalties imposed. Aggrieved of the same, the appellants are before us. 3. The learned Counsel for the main appellant, J & J Precision Indsustries and its proprietor, Shri. Joit Kumar Jain, made the following submissions:- 3.1 The appellant manufactures Watch Cases and Watch Straps from various base metals like Stainless Steel, brass, copper etc. The major buyers are Titan Watch industries Ltd., Duncan Industries, Rishabh Industries and Prerana Industries. The Appellants availed Cenvat Credit on inputs during April 2003 to April 2005 as under : S. No. Name of the Supplier Material Amount of the credit availed. 1. M/s. Annapurna Impex Pvt. Ltd., Ludhiana Copper Rs.3,06,03,937/- 2. M/s. Mardia Samyoung Capillary Tubes Ltd. Copper/ Brass Rs. 70,48,480/- 3. M/s. Mardia Tubes Ltd. Copper/ Brass Rs. 10,04,622/- 4. M/s. Jay Wire & Conductors Copper Rs. 5,17,445/- 5. M/s. Deepak Glass & Plywoods Float Glass Rs. 37,38,809/- 6. M/s. Uttam Glass Company Sheet Glass Rs. 9,91,379/- 7. M/s. Lata Steels Stainless Steel Rs. 6,45,875/- Total credit availed Rs.4,45,50,547/- ....
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....f appellant's employees and others wherein he has given a detailed chart indicating contents of the statements and whether retracted or not. Apart from these statements, the Ld. Commissioner has relied upon other evidences which are as under : (a) Invoice Nos. 307 dated 23/3/05 and 310 dated 24/3/05 issued by M/s. Annapurna Impex Pvt. Ltd. and on these dates, there was no physical stock available with the said supplier. (b) Panchnama proceedings drawn on 18/5/2005 at the factory of M/s. Annapurna Impex Pvt. Ltd., as per which they did not have any facility to manufacture Copper ingots, and no quantity of copper ingots were found during the course of search. (c) Vehicle Verification Report indicating that Vehicle with registration nos. PB 08 AE 6428, PB 08 X 7854 and PB 08 W 3299, used for transportation of the goods supplied were in fact two wheelers. Verification Report from their Kolkata counterpart showed that the vehicle bearing registration No. WB 25 A 3380 allegedly used for transportation was a light motor vehicle. (d) Verification of Bank Account No. CA 042010200007443 of M/s. Annapurna Impex Pvt. Ltd., at UTI Bank Ltd., Ludhiana for ....
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....ned as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall be so far as may be, apply in relation to any proceedings under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." 3.6 The scope of Section 9D came up for consideration before Delhi High Court in the case of J&K Cigarettes Ltd. v. Collector of Central Excise 2009 (242) ELT 189 and followed in the case of Basudev Garg Vs. CC [2013 (294) E.L.T. 353 (Del.)]. The Hon'ble High Court while upholding the validity of Section 9D also held that the right of cross examination in any quasi-judicial proceedings is a valid right given to a noticees as these proceedings may have adverse consequences to the accused while at the same time, under certain circumstances this right of cross examination can be taken away. Such circumstances have to be exceptional as stipulated in said Section 9D. It is thus clear that unless such circumstances exist, the noticee has a right of cross ....
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....olkata, there was only one vehicle which was a light motor vehicle and as per Thane RTO's report, there were 4 vehicles. The appellant submits that since the subject inputs were delivered at their factory, they cannot be blamed for the wrong registration numbers declared on the L.Rs. At worst, Cenvat credit attributable to these vehicles which were incapable of carrying the inputs could be demanded from them and the Ld. Commissioner could be asked to quantify the demand in respect of inputs pertaining to these vehicles. 3.9 The Ld. Commissioner has relied upon the statement of bank account of M/s. Annapurna Impex Pvt. Ltd., at UTI Bank Ltd., Ludhiana in para 103(v) of the order in respect of cash withdrawals to conclude that no goods were supplied. This cannot be a direct evidence as it is for Annapurna Impex Pvt. Ltd., to explain as to why they have withdrawn the cash and there is neither any evidence from the appellant's proprietor nor from the representative of Annapurna Impex Pvt. Ltd., evidencing that cash was sent back to the appellant. In any case, the cash withdrawn was negligible compared to the total consideration paid by the appellant. 3.10 The ....
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....sals while computing the duty demand. 3.16 In the light of the above submissions, the Id. Counsel for the appellant pleads for remand of the case to the adjudicating authority for giving an opportunity to the appellant for cross examination of the witnesses whose statements have been relied upon by the Revenue in support of their case. 4. Submissions on behalf of the co-appellants: 4.1 The Id. Counsel for M/s Gullchem Industries and its proprietor Mr. Narayan Walwalkar, submits that they undertook job-work of buffing/polishing of the watch-casings supplied by M/s J & J Precision Industries. The charge against the main appellant is availment of Cenvat credit without receipt of materials. The job-work activities undertaken by the appellant has nothing to do with availment of cenvat credit. Even if it is assumed that they showed in the job-work documents of having undertaken gold plating without having actually undertaken the said activity, it would not alter the position. Therefore, the charge against the appellant of having aided/abetted M/s J & J Precision Industries Ltd in availing ineligible cenvat credit is bereft of any logic and consequently, imposit....
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....m. They also dispute the statements of the transporters who have denied having transported the goods from their premises to Goa. In any case, it is their submission that since the goods supplied by them are not liable to confiscation, they are not liable to any penalty under Rule 26 of the Central Excise Rules, 2002. 5. The learned Special Consultant for the Revenue made the following submissions:- 5.1 The appellant M/s. J & J Precision Industries, Goa is a proprietary firm of Shri Joit Kumar Jain, engaged in the manufacture of Wrist Watch Cases falling under sub-heading 9111.00 and Wrist Watch Straps falling under sub-heading 9113.00 of the Central Excise Tariff Act, 1985. The main raw-materials used in the manufacture of the said wrist watch cases and straps are brass, stainless steel & mineral glass. 5.2 Based on an intelligence that the appellant-firm was availing irregular & inadmissible cenvat credit on the basis of invoices without receiving any inputs, the officers of DGCEI, Mumbai caused detailed enquiries at various places. In the course of such enquires, the officers made searches of the premises of the appellant-firm, its purported suppliers o....
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.... R. Naik, employee in-charge of issue of raw materials for production and Shri Premchand Pukhraj Bafna, Stores in-charge, who were shown invoice nos. 306 & 307 dated 23/03/05 & invoice no. 310 dated 24/03/12005 issued to the appellant firm by M/s. Annapurna Impex Pvt. Ltd., Ludhiana under which copper rods were shown to have been received in the factory in their statements recorded on 25/04/2005 had, inter alia, categorically stated that no such materials were received in the factory. (iv) Smt. Namrata Vaze, Accounts Assistant, in her statement recorded on 25/04/2005 had, inter alia, stated that she was working for the last two months and was responsible for preparing the Goods Receipt Note (GRN) of raw materials received in the factory. On being shown the relevant pages of the stock register for receipt of copper rods, she stated that entries in the register had not been made by her. 5.4 Statements of transporters: Scrutiny of central excise invoices issued by M/s. Annapurna Impex and some of the Lorry receipts indicated that the consignments from M/s. Annapurna Impex to the appellants' factory at Goa were transported by two transporters, namely, (i) M/s. Sat....
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....s. He was asked as to whether he purchased the material directly from M/s. Annapurna Impex, he stated that he purchased through a broker named Ashok and the material was delivered at the factory gate and he had never made any payment towards freight. He also stated that no gate register was maintained at his factory for recording such receipt of materials. He was shown the statement of a transporter who had purportedly transported copper items from M/s. Matiz Metals Pvt. Ltd., Meghalaya to his factory at Goa and that he had denied having transported any such materials from Meghalaya to Goa, he stated that he did not know why this person had given such a statement. On a query, he stated that he had purchased the material from M/s. Matiz Metals Pvt. Ltd., Meghalaya through a broker called Vastimal whose particulars he was unable to recall. 5.8 Shri Anirudha Narayan Walawalkar, the person in-charge of design, development and quality of the appellant-firm, in his statement recorded on 06/07/2005, had, inter alia, stated that the main raw materials used were brass, stainless steel and mineral glass in the thickness range of 0.8 to 1.2 mm in the manufacturing process of Wrist Wa....
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....lore, such hand writing appeared to be of the same person. Hence the matter was referred to the Central Govt. Examiner of Questioned Documents. Hyderabad who vide his report dated 29/11/05 reported that the handwriting in both the cases is of the same person, thus clearing the doubt that the consignment had never been transported to Goa. 5.11 Shri Ambalal Jain, proprietor of Deepak Glass & Plywoods, Bangalore, in his statement recorded on 28/10/2005, had, inter alia, stated that no material had ever been sent to the appellant firm at Goa and bogus invoices had been prepared to facilitate availment of cenvat credit. On a query as to why the rubber stamp of J & J Precision Industries, Goa was affixed on the LRs, he stated that it was affixed at Bangalore by his staff to show that the material had been unloaded at J & J Precisions Industries, Goa. 5.12 Shri Bhavarlal Jain, proprietor of M/s. Uttam Glass Co. in his statement dated 08/11/05 had, inter alia, stated that no material had been dispatched to M/s. J & J Precision Industries. Only invoices were given to it to take fraudulent cenvat credit. When he was shown his invoice no. 002 dated 14/07/2004 for sheet glass....
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....05, the factory premises of the appellant-firm were searched by the officers of DGCEI, Mumbai and various incriminating documents were seized under a Panchnama drawn in the presence of Shri Joit Kumar Jain, Proprietor of the firm and two independent panchas. Perusal of the Panchnama would show that the Officers also ascertained the raw materials lying in stock and found that only brass rods/strips and stainless steel strips were in stock. No item of copper or glass was found in stock. The panchnama is a substantive piece of evidence. (ii) Panchnama dated 18/05/2005 drawn at the premises of M/s. Annapurna Impex Pvt. Ltd.. Ludhiana : The factory premises of M/s. Annapurna Impex Pvt. Ltd. were searched by the officers of DGCEI, Ludhiana on 18/05/2005 in the presence of its employees and a Panchnama was drawn. No relevant records were found in the factory. However, the officers noted the machinery installed in the factory. They found that there was no facility to manufacture copper ingots or copper wire rods nor was there any stock of copper ingot or copper wire rods in the factory. (iii) Purchase order tracking register : The appellant-firm maintains a regis....
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.... register, there were three entries showing copper rods sent to Unit-III of the appellant-firm under challan no. 33 dated 13/04/2005, challan no. 35 dated 13/04/2005 and challan no. 36 dated 14/04/2005 for manufacture of watch straps. These entries were compared with the seized document no. 3, i.e. Annexure-V register maintained at Unit-III for receipt of inputs or partially processed goods under Rule 57F(4) and/or notification no. 214/86-CE dated 25/03/1986 for the period 01/01/2005 to 01/07/2005, but no such receipt of copper rods was shown in the said register. It is, therefore, quite evident that no such copper rods were sent to Unit-III. Consequently, no entry was made in the said Annexure-V Register. (v) Seized document no. 63 is a file containing misc. papers. Page no. 105 is a printed sheet giving specifications of various types of watch cases manufactured by the appellant-firm. This document clearly shows that all the wrist watch cases were made from either brass or stainless steel. Hence, it is evident that no watch case was made by the appellant-firm by using copper. (vi) Seized document no. 51 is a file containing invoices of M/s. Multi-Arc India Ltd. All the invo....
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....s been violation of principles of natural justice. It is submitted that the grievance of the appellant-firm is not genuine. The Commissioner has not solely relied upon the statements of various persons. He has considered various other documentary evidences establishing the fact that the appellant-firm had availed Cenvat Credit without receipt of the inputs physically. In light of these facts, it cannot be said that there has been any violation of principles of natural justice by not allowing cross-examination of the witnesses. (ii) In the case of K. Balan v. Govt, of India 1982 (10) ELT 386 (Mad.), the Hon'ble Madras High Court has observed that "the right to cross-examine is not necessarily a part of reasonable opportunity. Whether in a particular case, a particular party should have the right to cross-examine or not depends upon the facts and circumstances of the case and it very largely depends upon the adjudicating authority who is not guided by the rules of evidence as such". (iii) In the case of Indru Ramchand Bharvani V/s. Union of India - 1988 (38) ELT 459 (Del.) in para 23, the Hon'ble High Court has observed "Eventually each case would turn upon its own fact....
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....bunal has observed that the cross-examination of witnesses, wherever necessary, has to be allowed in Departmental Proceedings. But it is not required that in each and every case cross-examination should necessarily be allowed. There is no absolute right of cross-examination provided in the Customs Act. Hence, it cannot be demanded as a matter of right. The presumption is that unless the noticee makes out a case for cross-examination, he will not be granted cross-examination. (viii) In the present case, the appellant had requested for cross-examination of certain witnesses vide its letters dated 09/06/2006 and 26/06/2006 without giving any reason or justification, whatsoever. Therefore, the grievance of the appellant that he has been denied cross-examination in violation of the principles of natural justice is totally unacceptable. (ix) Learned Counsel for the appellant-firm, heavily relied upon the judgment of the Hon'ble Delhi High Court in the case of J & K Cigarettes Ltd. (supra) and the judgment of the Allahabad High Court in the case of Parmarth Iron (P.) Ltd. (supra). In the case of J&K Cigarettes Ltd. (supra) the Hon'ble High Court has observed that though the ....
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.... prejudice has been caused to the appellant and therefore, the impugned order is not sustainable in law. A strong reliance is placed on the decision of the Hon'ble High Court of Delhi in the case of J&K Cigarettes Ltd. (supra) and the decision in the case of Basudev Garg (supra). In these decisions it has been laid down that Section 9D to the Central Excise Act mandate that the statements recorded under Section 14 shall be relevant for the purpose of proving an offence under the said Act, and therefore, right of cross examination of the deponents of statements has to be given if they are relied upon by the Revenue to prove the charge against the accused. Only in certain situations, namely, when a person who made statement is dead or cannot be found, or incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense, which under the circumstances of the case, the court considers unreasonable, statements can be relied upon without cross examination. In all other situations, the statement against the assessee cannot be used without giving them an opportunity of cross examining the deponents. C....
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.... defend himself. Similarly in the case of Mehek Glazes (P.) Ltd. v. Union of India [Application No. 2358 of 2013, dated 28-2-2013] the Hon'ble High Court of Gujarat held that the right to cross examine has to be examined by the adjudicating authority separately and a decision taken thereon. The adjudicating authority has the right to reject the request for cross examination and if he exercises this right judiciously, it cannot be said that the principles of natural justice have been violated. In Bharti Bhutada v. Commissioner of Customs [Application No. C/Stay-1123, 1124 & 1135/2009, dated 7-1-2011], it was held that cross examination of witnesses cannot be claimed as a matter of right. If the reasoning for denial of cross examination is stated clearly before the adjudication process is completed, then it cannot be said that there is any denial of principles of natural justice. 7.5 In the present case, we notice that before the proceeding with the final adjudication, the adjudicating authority had given a hearing on the request of the appellant with regard to cross examination and had rejected the request giving reasons for such denial. The record of personal hearing dated 1....
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....proceeding. Recording of a statement under section 14 of the Central Excise law by issue of summons is a judicial proceeding under the Indian Penal Code. In these circumstances, statements of the employees of the main appellant which are corroborated by the incriminating documents seized during investigation can be fully relied upon as provided for under the exceptional circumstances specified in section 9D as exerting undue influence to retract the statement would also amount to "keeping out of the way by the adverse party". 7.7 Now let us see whether denial of cross-examination of M/s Annapurna Impex has caused any prejudice to the appellant. When the factory of M/s Annapurna was searched on 18/5/2005 under a panchnama proceeding, it was noticed that the said firm had no facility to manufacture copper ingots or copper wire rods nor was there any stock of copper in the factory. Sri Purushottam Lal, office attendant, who was present at the time of search, also confirmed that the said firm had no melting furnace in their factory and no manufacturing facility for copper rods in their factory. Further in many of the invoices/LRs issued by Annapurna, the names of the transporters we....
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..... In this case also, the purchases were effected through a broker called Vastimal whose particulars/whereabouts could not be given by Shri Joit Kumar Jain. In these circumstances, the only conclusion that can be drawn is that no prejudice has been caused to the appellant by denial of cross examination of M/s Annapurna and M/s Matiz Metals and we hold accordingly. 7.8 The fact that the appellant never received copper ingots/rods and never used the same in the manufacture of' watch cases/straps is also corroborated by the statements of the employees of the appellant firm. Sri Ratnakar Mahale, Accountant and authorized signatory in his statement dated 25/4/05 has confirmed that copper ingots had never been used in their factory. He had also voluntarily debited sums of Rs. 6,08,057/- and Rs. 6,06,780/- in respect of invoice nos. 306 dated 23/3/05 of M/s Annapurna and invoice nos. 78 dated 11/11/03 and 80 dated 14/11/03 of M/s Matiz Metals on 25/04/05. Similarly Sri Nagaraj, Production in-charge of the appellant firm had also stated that he had never seen copper ingots/rods being received in the factory. He has further confirmed that for manufacture of wrist watch cases and strap....
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.... the search proceedings clearly indicated the raw materials used for various types of watch cases to be brass/stainless steel. These corroborative evidences available on record also establish the fact the appellant never used any copper rods/bars and sheet/float glass in their manufacturing activities. 7.10 A major buyer of the appellant's products namely, M/s. Titan Industries Ltd., Hosur, has confirmed that they were procuring wrist watch cases/straps from the appellant firm, which was made of brass/stainless steel and have never come across any copper based wrist watch cases/straps. Similarly, M/s Jayashree Horologicals, who had supplied glass materials to the appellant, also confirmed that they had supplied mineral glass of thickness ranging from 0.80 to 1.20 mm. They have further confirmed that float glass/sheet glass are never used in the manufacture of wrist watches as they do not meet the transparency and thickness requirement for wrist watches. M/s Plasma Gold Coatings Pvt. Ltd. who were engaged in ion-plating of wrist watch cases/straps for the appellant have also confirmed that they had never received from the appellant firm any wrist watch cases/straps of copper ....
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.... adjudicating authority confirming the duty demand cannot be faulted at all except in respect of a sum of Rs. 59,21,157/- reversed by the Appellants in RG-23 Part II on account of return of goods to M/s. Annapurna Impex Pvt. Ltd. 7.14 An issue of fraudulent availment of cenvat credit using bogus transport documents arose for consideration by this Tribunal in the case of Viraj Alloys Ltd. vs. CCE, Thane - II 2004 (177) ELT 892 (Tri-Mumbai). In that case, enquiry with the RTO revealed that the registration numbers of the vehicles mentioned in the invoices were mostly non-transport vehicles and the assessees were not able to produce the gate registry for entry of the vehicles. In that context it was held by this Tribunal that the assessees are not eligible to avail CENVAT credit covered by those invoices. A similar view was taken by this Tribunal in the case of Ranjeev Alloys (P.) Ltd. v. CCE 2009 (236) ELT 124 (Tri. - Delhi). In that case also this Tribunal held that the assessee is not entitled for CENVAT credit of the duty paid on the inputs covered by the invoices where the transport vehicles were found to be incapable of carrying the goods covered by the invoices. It was furth....
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....eyond reasonable doubt." Similarly in the case of Collector of Customs v. D. Bhoormull [Civil Appeal No. 1142 of 1973, dated 3-4-1974] the hon'ble Court further held as follows: "It cannot be disputed that in proceeding for imposing penalties under Clause (8) of S.167 to which s. 178-A-does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrary. But in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree, for, in all human affairs, absolute certainty is a myth, and as Prof. Brett felicitously puts it all exactness is a fake" El Dorado of absolute proof being unattainable, the law accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the e....
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.... to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata.' This observation of the hon'ble apex court applies on all fours to the facts of the present case. 7.17 In view of the foregoing discussion, we uphold the confirmation of demand of Rs. 3,86,29,390/- (Rs. 4,45,50,547 minus Rs. 59,21,157, already reversed in respect of the material returned to M/s Annapurna) along with interest thereon under the provisions of Rule 12/14 of the Cenvat Credit Rules, 2002/2004 read with section 11A(2) and 11AB of the Central Excise Act, 1944. 7.18 As regards the penalty imposed under section 11AC, the penalty is no doubt imposable as the appellant has played a fraud on the exchequer. However, imposition of penalty both on the proprietory firm and the proprietor is not correct in law. Therefore, while upholding the penalty imposed on the proprietory firm M/s J & J Precision Industries under section 11AC equivalent to the duty demand confirmed as above, we set aside the penalty imposed on the proprietor Sri Joit Kumar Jain. 7.19 As regards the pena....
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....ire receipt of inputs which is recorded in the private and statutory records, as well as its issue is also recorded for the purpose of manufacture. Further, the payments for purchase in all the cases have been made by cheque. It is further stated that finished goods which have been manufactured and sold, could not have been manufactured without receipt of the inputs in question. It is not the Revenue's case that some alternate material has been purchased and used for production. (Emphasis supplied) 10.2 In respect of transportation of the inputs in question, most of the inputs have come to the appellant's factory on the usage of way-bill/road permit, which is statutory requirement under Sales Tax provisions for transportation of goods across the border of the state as well as intra-state. In most of the cases, such way-bills are machine numbered and issued by the concerned Sales Tax authorities and proper register are maintained, wherein details of the company, invoice no the way bill no., lorry no., nature of goods etc. are entered. 10.3 It is further pointed out that at the time of inspection of the factory premises on 25.4.2005, the stock of finished goods and raw ....
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....o dispute that the supplier M/s Annapurna Impex have paid the duty on the copper so supplied. There is no expert opinion on record to conclusively show that such supplier M/s Annapurna Impex could not have manufactured the copper ingots supplied to the appellant. Further, no verification report has been obtained from M/s Annapurna Impex, Ludhiana whether M/s Annapurna Impex have manufactured and/or cleared copper ingots. Further, in respect of the appellant's request to the Revenue authority at Ludhiana, to verify the genuineness of goods manufactured at M/s Annapurna Impex, no adverse report have ever come from the Revenue authority at Ludhiana. 10.7 Further, the Revenue have failed to appreciate the submissions that other than bald allegation of non-use of copper by the appellant, the Revenue have, other than relying on the statements, not brought any clinching evidence to establish that the appellant could not have used copper in manufacturing its output. None of sample of finished goods available have been got tested by the Revenue and thus, there have been miscarriage of justice as the Revenue has relied mainly on evidence being the statements recorded. 10.8 Further,....
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....e had stated that they had sufficient machinery for manufacture of copper supplied. The contention was backed by the affidavit, which the adjudicating authority has failed to consider without assigning any reasons. 10.13 So far the findings in respect of about 4-5 vehicles being two wheelers or three wheelers/LMV is again absurd. There are not less than 150 transportation details, and after verifying the entire lot, the department comes out with a case with respect to 4 to 5 such vehicles, which is immaterial as the same are more likely clerical errors in preparing the documents/transport challan, wherein the concerned inputs have been transported by more than 150 vehicles. For such minor error, in less than 3 per cent of total, drawing adverse inference that there is no transportation of inputs is unsustainable and fit to be set aside. 10.14 So far as observation with regard to Bank transaction of M/s Annapurna Impex is concerned, they clearly show that the appellant have paid for inputs through account payee transaction by way of cheque/NEFT transaction. Only for the sake of there being cash withdrawal in a few days of deposit do not by itself stand as a sufficient proof, f....
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....as pointed out that the same is clerical error due to purchase order made in haste for business exigencies. The fact that the goods have been received and payment made by cheques are through Banking channel, establishes the genuineness. In view of the fact that the RG-23A register have been accepted as correct and maintained in the regular course of business, the Revenue cannot deny an entry at random by alleging non-receipt of inputs and/or no finding mentioned in the impugned order. The said purchase order tracking register is a private document and maintained as per the sweet wish by the proprietor for the sake of convenience. It is in fact evident on the face of the record that inasmuch as 90% of the transaction for the inputs purchase which have been treated as genuine, is not mentioned in the 'purchase order tracking register'. Thus, the Revenue has blown both hot and cold in drawing inference by reference to a few transactions, not found mentioned in the 'purchase order tracking register'. From the statement of Shri Shimpi of M/s Multi Arc, demonstrated that the appellants manufacture straps of various metals but the same are only mentioned as brass, in the j....
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....atement of the transporters that the goods have not been transported is not tenable and fit to be set aside. There is no investigation with regard to payment of freight. Further, the purchase of input in almost all the cases being interstate are fully supported by issue of Form-C, which is duly recorded in the records of the Sales Tax Department and such purchase cannot be disbelieved. Form-C is issued normally subsequent to receipt of the goods, after verification of the records. Further, proper register is maintained as per the Sales Tax Rules of the State. Copies of Transport Declaration Form No. ST XXIV-A under Rule 14-B of Excise & Taxation Dept, Punjab were produced before the adjudicating authority, a few copies are also annexed at pages 347A to 353 of the appeal-book. From a perusal of the Transport declaration form, it shows serial number of the form, date, name of consignor - Annapurna Impex (P) Ltd., Ludhiana, name of consignee - J.J. Precision, Industries, Goa, Transporter name - New Satkar Tempo Transport Union/Bombay, Patiala Transport Co., Trip Sheet No., Bill No. with date, value of goods and their destination. Thus, in view of documentary evidence on record, defini....
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....the Cenvat Credit Rules, 2002/2004 read with Section 11A(2) and 11AB of the Central Excise Act, 1944 and liable to equivalent amount of penalty under Section 11AC ibid and the co-appellants M/s. Annapurna Impex Pvt. Ltd., Mardia Samyoung Capillary Tubes Co. Ltd., Mardia Tubes Pvt. Ltd., Jay Wire & Conductors, Deepak Glass & Plywoods, Uttam Glass Company, Lata Steels, Shri Navneet Agrawal, Shri Ravindra Mardia, Ramesh Ratilal Chauhan, Shri Pawan Lata, Shri Pravin Singh and Gullchem Industries are liable to penalty of Rs. 5,000/- each under Rule 27 of the Central Excise Rules, 2002 as held by the Hon'ble Member (Technical), in view of the detailed findings recorded by him in paras 7.1 to 7.16 of the above order; OR The matter should be remanded back to the adjudicating authority for de novo consideration as held by the Hon'ble Member (Judicial). THIRD MEMBER ORDER M.V. Ravindran, Judicial Member (As a Third Member) - This difference of opinion is listed before me on the direction of the Honourable President to resolve the following difference of opinion. Whether M/s. J & J Precision Industries are liable to pay demand of Rs. 3,86,29,390/- along with interest th....
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....rters to hold that the appellant has availed ineligible Cenvat credit. He would draw my attention to the fact that the request as made by the appellant has been rejected without giving any reasons. He would then draw my attention to the order in original and submit that the adjudicating authority has in fact relied on only the statements and come to a conclusion of ineligibility to avail Cenvat credit. It is his submission that paragraph number 26 and 27 specifically records it so. It is his submission that though the adjudicating authority in paragraph number 103 has stated that he is now examining the direct evidences against the appellant appellants, but has not done so, as the said paragraph at bullet point number (v & vi) specifically records that the facts of the fictitious transactions were corroborated by the enquiries conducted in respect of various transporters as also the suppliers of various materials like glass etc. He would then take me through the provisions of Section 9D of the Central Excise Act. He would submit that the said section was interpreted by the Honourable High Court of Delhi in the case of Basudev Garg (supra) and the case of J & K Cigarettes Ltd. (supr....
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....-examination cannot be asserted in all enquiries. It is his submission that the findings recorded by Honourable Member (Technical) is correct. 6. Heard both sides and perused the records. 7. The main and the only issue in this difference of opinion is whether the lower authorities have violated the principles of natural justice by denying cross examination for the appellant and whether the matter needs reconsideration by the adjudicating authority for following the mandate of Section 9D of the Central Excise Act, 1944. 8. At the outset I would like to record, that though special Counsel for the revenue in the elaborate submissions made to me through various documents on which reliance was placed for holding against the appellant, in my view, the difference can be decided by reading the provisions of section 9D of the Central Excise Act, 1944. The said section reads as under:- "Section 9D - Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any Central Excise Officer of a Gazette rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for....
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....xamination who had made a statement on earlier occasion. The provisions under Section 9D of the Act are necessary to ensure that under certain circumstances, as enumerated therein, viz. if the witness has been won over by the adverse party or is avoiding appearance despite several opportunities being given. The rationale is that decision making in a case cannot be allowed to continue in perpetuity. These provisions are based on the Doctrine of Necessity. It provides for relevancy of statements recorded under Section 14 of the Act dispensing with or without the opportunity for testing the truth of such evidence by cross-examination. For, when a person is dead or incapable of giving evidence or cannot be found, no better evidence can be had in the circumstances than the statement tendered by witnesses before a quasi-judicial authority. The safeguards which are enumerated in the provision under Section 32 of the Evidence Act are essential as the provision provides for an exception to the rule of exclusion of hearsay evidence, while proving for relevancy of even direct oral evidence of the fact under enquiry, which otherwise is not admissible, to ensure that there is no miscarriage ....