TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 948
X X X X Extracts X X X X
X X X X Extracts X X X X
....der Rule 173 Q(2) with an option to redeem on payment of Rs. 25 lakhs. Further, penalty amounting to Rs. 21 lakhs have been imposed under Rule 173 Q(l) (bb) read with Rule 209A imposed for taking suo-moto credit of 21,00,000/-. Personal penalty of Rs. 5 lakhs was imposed on Shri PX. Singhal, Manager (Finance) Excise & Taxation of the appellant Company who have also filed a separate appeal and a penalty of Rs. 2 lakhs was imposed on Shri Pramod Sachdeva owner of the M/s Sachdeva Transporter, G. T. Road, Ghaziabad under Rule 209A. 2. The brief facts are that appellant is a registered manufacturer with the Central Excise Department since 1995. The appellant have been regularly filing statutory returns and maintains the records as required. The records of the appellant were periodically audited by the Departmental officers and also by the officers of Accountant General, U.P. Under the compounded Levy scheme which came into effect from 01.09.1997, the appellant opted for it and declared parameters of both its rolling Millis for determination of annual production capacity. During the entire period of operation, under the compounded Levy Scheme, which was in effect till 31.03.2001, the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... namely MS billets, MS ingots received by the appellant from the Rathi Ispat Ltd. The appellant on being coerced by the revenue, reversed the Cenvat Credit of Rs. 21,00,000/-. Which was legitimately taken on purchase of inputs. The inspecting officers also coerced the appellant to make another debit entry on the next page of the register being Page No.56 towards penalty for an amount of Rs. 21,00,000/-, The appellant protested by filing a representation before the Commissioner on 14.12.2000. On not getting any relief, the appellant also preferred a Writ Petition No. 21/2001, before Hon'ble Allahabad High Court, wherein the Commissioner was directed to decide the representation. On not getting any relief from the Id. Commissioner, the appellant again filed another Writ Application, challenging the order of the Commissioner, vide Writ Petition No.632/2001, which was allowed by the High Court setting aside the order of the Commissioner. The appellant under intimation to the revenue took re-credit of the said amount of Rs. 21 lakhs on 14.6.2001. The said re-credit was also disclosed in the RT-12 returns for the month of June 2001. The appellant also filed the declarations under rul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed). Since 1997, they were manufacturing alloy and non-alloy steel rolled products like M.S. Rods, S.S. Rods etc. During the compounded Levy period with effect from 1.09.1997, they were discharging duty on annual capacity of production determined by the Commissioner. Consequent to withdrawal of compounded Levy scheme with effect from 01.04.2000, for Iron and Steel products the appellant started paying duty under section 3 of the Act and also started availing Cenvat credit under the provisions of CCR. They cleared the entire quantity of rolled products manufactured, on payment of appropriate duty of Excise under the cover of proper invoices. They have regularly filed RT-12 returns, wherein the goods manufactured are disclosed as MS Bars, Rods/Tor steel, under chapter-72. The returns also disclosed manufacture of bars and rods of stainless steel. The appellant purchased the inputs/raw materials from various sources on payment of appropriate duty. Further on receipt of the materials proper, goods receipt note was prepared containing details of the Seller, vehicle number, quantity, Tare weigh and gross weight. On the basis of the invoice and goods receipt note Cenvat credit was availed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a matter of record that the appellants soon after withdrawal of the compounded, Levy Scheme had approached the department authority to amend the registration certificate for the inclusion of stainless steel rods and bars, as one of the products manufactured. Such request was accepted by the revenue upon verification and the registration certificate was amended accordingly. The fact of availability of rolling machines with the appellant, capable of rolling alloy steel and non-alloy steel products is also supported by certificate of the chartered engineer Shri H.K. Bhansaly of 11T Kanpur. Further, he relied upon documents namely certificates given by National Iron and Steel Industries and M/s Prince Steel industries, both manufacturers were supplying rolls to the appellant including during the relevant period which were used in the rolling mills, then both alloy and Non-alloy steel products were being rolled. The allegation of the revenue that the appellant was not capable of rolling alloy steel products is only a wild imagination and not backed by any techno feasibility report. That the appellant had categorically informed the revenue, after closure of the compounded Levy scheme tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llowing grounds:- 7.1 That the impugned order is vitiated as it proceeds on wrong assumption of fact that the appellant-company and Rathi Ispat Ltd. are family concerns. There is no manner of concern by way of inter connected holding or common directors. No averments have been made by the Revenue in support of their allegation that being family concerns, they have been provided with the facility of receiving Cenvat Credit from Rathi Ispat Ltd. 7.2 The whole case of Revenue is based on statements of employees of Rathi Ispat Ltd., who have nowhere stated that goods have been supplied to the appellant by way of paper transaction only. In other words, the appellant have received ineligible Cenvat Credit without receiving the materials. 7.3 The employees of Rathi Ispat Ltd. namely Haridwar Rai and Vinod Sharma have nowhere stated that the goods in question were not supplied with the invoices issued to the appellant. The statements of the said two employees is also contradictory as on the one hand, they say that Rathi Ispat Ltd. did not manufacture M.S. Billets/lngots since May, 2000, and on the other hand, they say that M.S. Billets and Ingots were found in the dump or scrap stock wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al truck numbers mentioned in the invoices relate to their transport. The transporter have also not disputed the raising of Bills for transport charges on the appellant. Further, the appellant have deducted income tax at source before payment of such transport charges and issued the TDS certificates to the transporter which have been not denied by the transporters. Evidently, the denial made by the said transporters appeared to have made under undue influence exercised by the inspecting officials. It is humanely impossible for the said Mr. Sachdeva to re-collect and comment from his memory, without reference to any records, on 100's of invoices (495+125), spread over a period of several months. 7.6 So far, the statements of the transporter to the effect that he did not send his truck for loading or transport of Scrap from Rathi Ispat to M/s Asvad Steel & Alloys (p) Ltd. and M/s Gauri Components (P) Ltd. and further, admission by the responsible person of said two concerns that they have availed ineligible Cenvat Credit based on invoices of Rathi Ispat and further voluntarily reversed/deposited the credit taken, does not lead to any conclusion against the appellant. 7.7 There ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edly issued by the Rathi Ispat on the appellant for sale of materials being inputs of the appellant which were allegedly shown to the transporter Pramod Sachdeva. That the calculation of demand of Rs. 2,45,49,032/- against the appellant is vague and unsubstantiated and not based on the relied upon documents. The Revenue have failed to verify the records of the appellant and have raised unsubstantiated demand which is fit to set aside. The Revenue have also not identified any alternative source of raw material, which have been utilised for manufacturing their finished products which have been cleared on payment of duty. 7.12 The learned counsel for the appellant have placed reliance on the Ruling of the apex Court in the case of Andman Timber Industries Vs. Commissioner, Central Excise, Kolkata reported at 2015 (62) Taxman.com 3(SC), wherein it has been held by the Court that denying an opportunity to cross-examine, amounts to violation of principle of natural justice and thus have quashed the entire assessment order. 8. The Learned A.R. for the Revenue relies on the impugned order. 8.1 He further states that the findings of the Ld. Commissioner are based on the statements and in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g no legs to stand. Similarly, the statement of the Transporter-Pramod Sachdeva, is also vague and made out of memory which appears to be under undue influence exercised upon him. Further, we find that the statement of all these persons, are self-contradictory as the employees of Rathi Ispat Ltd., having stated that M.S. Billets/lngots were found lying in the stock of Scrap, which were cleared on payment of duty. Similarly, the transporter, Pramod Sachdeva have also not denied the raising of bills for the transport charges on the appellant, nor have denied the receipt of money for such charges, and also deduction of income tax at source from the Bills. We, further, hold that there being no manner of concern, no adverse interference can be drawn from the statement of the authorized persons of M/s Asvad Steel & Alloys (P) Ltd. & M/s Gauri Components (P) Ltd. against the appellant. We also find that the impugned order is in the teeth of the Ruling of Hon'ble Supreme Court in the case of Andman Timber Industries (supra). We also find that the allegations of family concern on the appellant (company) viz-a-viz Rathi Ispat Ltd., is vague and no averment supporting the same have been m....