TaxTMI 
TaxTMI 
2015 (11) TMI 1037
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....r convenience. The issue involved in these appeals is-whether the appellant-manufacturer have availed CENVAT credit on inputs without actually receiving the inputs. 2. The brief facts of the case are that M/s Tulsi Extrusions Ltd. (Unit No.- I) and Tulsi Extrusions Ltd. (Unit No. II) commonly known as TEL are engaged in the manufacture of PVC Pipes, fittings. They are availing CENVAT credit of inputs used in manufacture of their finished goods. Shri Khiwanmal Lohiya is Authorised Signatory of both the Units. Shri Mukesh Sangla is director of M/s Signet Overseas Ltd. (SOL) which is a registered dealer of different Plastic Polymer manufacturing companies and is supplying goods to M/s TEL. 3. M/s TEL (Unit No.1) and (Unit No.2) were issued separate show-cause notices dated 24.11.2009 alleging that during searches conducted by the officers of DGCEI, Indore at office and godown premises of M/s Signet Overseas Ltd.(SOL for short) and its associate concerns, residence of Shri Mukesh Sangla, residence of employees of M/s SOL, namely- Shri Kirti Kala, Cashier of M/s SOL, Shri Paras Patidar, Marketing Manager of M/s SOL and Shri Ravindra Pingle, godown incharge of M/s SOL, the Revenue ....
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....rther alleged in the show-cause notice, That scrutiny of ledgers on laptop of Sri Kala in respect of transactions pertaining to M/s Tulsi Extrusion Ltd. Unit No. 1 and Unit No.2 revealed that the transactions collectively covered the elements viz. (i) payment in cash (ii) receipt by cheques & (iii) VAT. Shri Kirti Kala in his statement dated 18.02.2009 stated that in respect of entries pertaining to M/s TEL showing cash deposit in Punjab National Bank account at Pune of M/s TEL, only Shri Mukesh Sangla could reply as he is not having any details in this regard. Shri Mukesh Sangla in his statement dated 26.02.2009 stated that the amount deposited in bank account of M/s TEL has got nothing to do with the transaction of M/s Signet Overseas as it was amount of M/s TEL only and M/s SOL has just provided assistance to M/s TEL in depositing such amount in their accounts. It was contended in show-cause notice that one of the files seized from office premises of Shri Mukesh Sangla contained a letter written by Shri Dilip Shirke of M/s SOL, Pune to M/s TEL, Jalgaon wherein he had informed M/s TEL that an amount of Rs. 23,50,000/- has been deposited by him in Punjab National Bank account of M....
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....ound that no such transport company ever functioned or even existed at the given address. Summons were also issued to Shri Khiwanmal Lohiya, authorized signatory of M/s TEL who refused to comment upon the ledger entries appearing in laptop of Shri Kirti Kala in respect of M/s TEL and stated that all the material/inputs on which credit has been availed by them were received in their factory. Shri Lohiya during his statement dated 21.04.2009 produced the bank statement and freight ledger showing freight payment made by M/s TEL to M/s Shree Ganesh Transport. He also stated that the transport from Mumbai was arranged by M/s SOL, and they only made payment to the transporter. He also stated that in case of Pune, they do not have any staff and therefore in case of sales made at Pune, the staff of M/s SOL collects the payment on their behalf and deposited in our (TEL) bank account. He also stated that they never received any cash amount from M/s SOL and cannot comment upon the entries in ledger maintained by Shri Kirti Kala in his laptop. The show-cause notice further alleged that M/s TEL has availed credit of duty paid on invoices issued by M/s SOL, whereas no goods were actually consign....
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....on of business transaction between the assessee-appellant and M/s. SOL. Mr. Dilip had categorically stated that he had provided necessary assistance to the employee of the appellant in depositing the money in the bank. It was further contended that in view of the fact that Mr. Kirti Kala have stated that he does not know or recognise any person of the appellant to whom the alleged cash was given and further stated that such transactions can be explained only by the Dir Mr. Mukesh Sangla. Thus the statement of Mr. Kala is unreliable in absence of cross examination. It was further urged that the show-cause notice covers invoices where the goods have been transported by Ganesh Transport Company, in spite of the fact that different transporters were engaged for transport of inputs consigned by SOL to the appellant-TEL. Further the appellant have been purchasing raw materials from SOL since 2002, but only some purchase invoices for the period April 2006 to September 2007 are alleged to be bogus. Further investigation failed to verify the lorry Numbers or details of the owners. Further investigation have not found any errors or anything suspicious in their accounts and records maintained....
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....dication proceedings, and vide Order-in-Original Nos. 83/Addl./Adj/2010 dated 31.12.2010 and 84/Addl./Adj/2010 dated 31.12.2010 confirmed the proposed demand with equal amount of penalty under Section 11AC of the Act read with Rule 15 of CCR's along with interest under Section 11AB against M/s TEL (Unit No. 1) and Unit No.2. Personal penalties were also imposed upon Shri Khiwanmal Lohiya and Shri Mukesh Sangla. 10. Being aggrieved the appellants herein and Mr. Lohia as well as Mr. Sangla filed appeals before Commissioner (Appeals) who ordered to pre-deposit the amount of tax in dispute. Since the pre-deposit was not made, the appeals were dismissed on grounds of non compliance. The appellants filed appeal before this Tribunal. Vide Order dated 10.04.2012 this Tribunal remanded the case back to the Commissioner (Appeals) after ordering pre-deposit of Rs. 5 lakhs by the appellant-manufacturer. 11. The Commissioner (Appeals) pursuant to remand, vide Order-in-Appeal No. RPS/17-19/NSK/2013 dated 21.01.2013 and RPS/20-22/NSK/2013 dated 21.01.2013 rejected the appeal of manufacturer-TEL and modified the adjudication orders to the extent that in case of appeal against Order-in-Or....
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....me cases Cenvatable invoices were issued without actual supply of goods, but it can be seen that the name of M/s TEL does not appear in their statement. That Shri Mukesh Sangla, director of M/s SOL nowhere in his statements has stated that M/s SOL has issued invoices to M/s TEL without delivery of goods. That even Mr. Dilip Shirke, employee of M/s SOL has stated that the amount which was deposited in bank account of M/s TEL, belonged to M/s TEL and he had only assisted in deposit. (vi) That the money deposited in bank account of M/s TEL was collected by the employees of M/s TEL from the Farmers/Dealers and the same was apparent from the ledger of M/s TEL. The lower authorities have not found the contention untrue. The Ld. Commissioner (Appeals) ought to have appreciated that cross examination was demanded by the appellant wherein it was clearly stated that cross examination was must so as to find out the correct facts in respect of alleged cash transaction, which was not allowed. More so, the copy of entries on the laptop were not furnished to the Appellant. The letter of Shri Dilip Shirke relied upon by the Commissioner (Appeals) was neither relied upon in the show-....
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.... (TRI - DEL), CCE Vs. Shakti Roll Cold Strip 2008 (229) ELT 661, Arvind Enterprises Vs. CCE, Delhi 2013 (296) ELT 253, Monarch Metal Vs. CCE, Ahmedabad 2010 (261) ELT 508, CCE Vs. Parmatma Singh 2011 (266) ELT 67 to enforce his submission. 14. The Ld. A.R. while arguing for the Revenue places reliance upon the statement of employees of M/s SOL. He submits that Shri Kirti Kala, Cashier of M/s SOL has admitted maintaining lap top entries and hand written paper slips, showing the receipt and disposal of cash by him. That Shri Paras Patidar, Marketing Manager of M/s SOL had admitted the purchase of LRs from transporters on payment of cash of Rs. 100/- per LR. That Shri Mukesh Sangla, Director of M/s SOL at initial stage of investigation admitted that handwritten paper slips shows cash receipts against cheques received on account of invoices issued without any corresponding goods. That he also accepted that in some cases of sales, M/s SOL issued cenvatable invoices without delivery of goods and that the cash receipts are not reflected in their accounts. That the persons connected with M/s SOL also accepted having arranged bogus transport documents and LRS. That Mr. Dilip Shirke, Mark....
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....t although the impugned orders places reliance upon statement dated 06.12.2007 of Shri Kirti Kala and statement dated 06.12.2007 of Shri Mukesh Sangla wherein he stated that the entries in the laptop pertain to sale of polymers and receipt of cash against bogus invoices. However I find that in his statement dated 18.02.2009 Shri Kiti Kala stated to have knowledge about the cash details appearing in his laptop but in respect of M/s TEL he stated that only Shri Mukesh Sangla can explain such entries. Shri Mukesh Sangla in his statement dated 26.02.2009 has stated that the cash amount deposited in bank accounts of M/s TEL has got no connection with M/s SOL, as the same pertain to M/s TEL and they provided assistance in depositing such amount in bank. Further I find that Shri Lohiya, authorized signatory of M/s TEL in his statement had clearly stated that the cash deposited in bank account of M/s TEL was on account of their sale proceeds of finished goods and in absence of any employee at Pune, M/s SOL helped them in depositing such amount in bank. 15.2 Further, I find that neither the statement of Shri Ravindra Pingle, the godown Incharge nor the statement of Shri Paras Patidar poi....
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....umbai godown of M/s SOL from where the invoices were issued to M/s TEL. Some consignments were also received from M/s DCW (directly) through account of M/s SOL. No investigation has been conducted at Mumbai godown nor the records of said premises has been relied upon to show that the goods were not dispatched from the Mumbai Godown of M/s SOL and if dispatched having been diverted elsewhere. In case of goods received from M/s DCW, there is no investigation as to whether the goods were diverted elsewhere and not received by M/s TEL. The investigation is silent upon all these issues. Further it is not appearing on record that if the goods were not received by the Units of M/s TEL in that case what was the alternate source from where M/s TEL procured the goods. When the goods (inputs) were found to have been entered in records of M/s TEL and were shown to have been consumed in the production, which remains undisputed, I hold that looking to all these aspects the demand is not sustainable. 15.5 The Cenvat demand is also based on the premise that the transporter - Shri Ganesh Transport was not found at the given address and it did not exist at the address given in the LR. The counsel....
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....pal Pillai V.P. Marketing (Yarn), Shri Waman B. Wankhade, Clerk of M/s. New Golden Transport Co. and Shri Ashok Kumar, Accountant of M/s. Bhawana/Ashish Enterprises, Ludhiana make reference to documents like LRs with specific numbers and dates, GRs with specific numbers and dates, and the facts like dispatch of inputs in the name of the respondents, delivery thereof and receipt by M/s. Ashish Enterprises or M/s. Bhawana Enterprises, transportation of inputs from the manufacturer to those dealers of the respondents etc. The test report also discloses that some of the final product did not disclose presence of PFY as one of the elements having been utilized in the manufacture of such final product. As against this, it is equally true that the stock verification records maintained by the respondents did not disclose any infirmity which could reveal non receipt of any part of such inputs which were allegedly diverted to other parties. Undisputedly, the records do not disclose infirmity of any sort inspite of the fact that some of the final products revealed absence of PFY element therein, nor the records disclosed any discrepancy which could reveal and/or co-relate to the inputs allege....
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....o dispatched copper ingots weighing 53.325 MT after payment of Central Excise duty amounting to Rs. 7,01,838/-. The fact of clearing the copper ingots on payment of duty which is more than the amount of credit availed of by the appellants has not been disputed by the Revenue. If the Revenues case is that inputs were not received by the Appellants is accepted, the question remains as to how the Appellants have dispatched copper ingots, that too on payment of duty of more than Rs. 2 lakhs than the amount of credit availed by them. This aspect of the matter has not been considered at all. In view of the fact that the Appellants have shown clearance of copper ingots and paid duty goes to show that they have received the scrap and used the same in the manufacture of copper ingots. We, therefore, set aside the order and allow the Appeal." 15.8 In case of Hiren Aluminium Ltd. Vs. CCE, Valsad 2009 (245) E.L.T. 386 (Tri. - Ahmd.) it was held that- "15. At this stage we may discuss the various decisions relied upon by the ld. Advocate. Tribunal in the case of M/s. Tejwal Dyestuff Industries [2007 (216) E.L.T. 310 (Tri.-Ahmd.)], by majority decision it was held that if it is not ....
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....eny the credit, when there is evidence of receipt and utilization of inputs and no evidence of diversion is available. 16. The law as declared in the above referred judgment, when applied to the peculiar facts of the present case leads to only one inevitable conclusion that the inputs were actually received by the appellant, though in some of the cases fresh invoices were raised by the dealers, in between with a sole purpose of availing sales tax benefit, credit cannot be denied on that ground.. As such, we find no justification to uphold the impugned order of Commissioner denying the Modvat credit to M/s. Hiren Aluminium Ltd. and imposing penalties upon them as also upon other appellants. Accordingly, we allow all the appeals with consequential relief to the appellants." 15.9 Further I also find that the similar analogy has been adopted by the Tribunal in the case of M/s Motherson Sumi Electric Wires Vs. CCE, Noida 2009 (246) ELT 651 (TRI), CCE, Mumbai Vs. Nimesh Engineering Pvt. Ltd. 2009 (237) ELT 726 (TRI) and Tejwal Dyetuff Ind. Vs. CCE, Ahmedabad 2007 (216) ELT 310. 15.10 In case of CCE, Ludhiana Vs. Parmatma Singh Jatinder Singh Alloys Pvt. Ltd. 2011 (266) E.L....