TaxTMI 
TaxTMI 
2017 (9) TMI 497
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....39,514/- taken by the respondent M/s ATV Projects India Ltd. on 4 Cranes along with parts of handling equipments installed in 1996, which were released by IDBI bank. Pursuant to master the agreement dated 12/09/1995, and payment for the same was directly made by IDBI bank to the supplier M/s Vidiyani Engineers Ltd. (VEL for short), the supplier of the 4 cranes, in question. 3. The respondents M/s ATV Project India Ltd. are manufacturers of various items including items classifiable under Chapter 72, 73 and 84 of the Central Excise Tariff Act, 1985. Based on intelligence that respondent ATV have wrongly availed Modvat credit on EOT cranes shown to have been received from M/s VEL, Kosi Kalan under the cover of invoice number 97 and 98 both dated 15/12/1995, the factory premises of M/s ATV Project India Ltd. were visited by the officers of DGAE, Central Excise on 01/12/1998. The premises of supplier M/s VEL were found sealed by the District Authorities and accordingly could not be visited. Statement of Shri R.K. Khatri, Deputy Manager Finance and Accounts of M/s ATV Project India Ltd. was recorded on 01/12/1998. He was asked to produce the invoices of the said goods and to clarify as....
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....anufacturing Company, Mumbai, in his statement recorded on 26th July, 1999 stated that four cranes were supplied to M/s ATV Project India Ltd. He also submitted the invoice, transport documents, challans, payment details of the said cranes which showed that the said cranes were manufactured and delivered by M/s ACME Manufacturing Company, Mumbai. Shri B.R. Pandhi, Director of ATV in his statement dated 04th October, 1999 recorded under Section 14 of the Act, stated that to the best of his knowledge during this period the cranes were procured from Khandelwal Udyog and AVON. He also stated that he was whole time director of M/s Mathura unit from November, 1995 onwards and were looking after the business of development, meeting clients etc. Statement of one Shri Jugal Kishore Partner of M/s Syndicate Roadlines, Kosi Kalan was recorded on 16/02/1999, wherein he stated that he was one of the partners of the said transport company. On being asked, he stated that no material from his transport company was ever sent to Mathura from Kosi Kalan and particularly no material from M/s VEL was sent to ATV. On being shown the GR Nos.4479, 4478, 4447, 4476 and 4475, all dated 15th May, 1995, he fu....
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.... to current account no.1552 of M/s Vidiyani Engineering Ltd. maintained with Andheri (west) Branch of the Bank. From the perusal of the statement of account of various banks, namely, IDBI, Kanpur, Federal Bank Ltd., Andheri (west) Branch, Central bank of India, Nariman Point Branch, it was clear that Rs. 1,50,00,000/- was transferred to the account No.CD 2638 of Central Bank of India, Nariman Point, Mumbai on 22nd September, 1995 from account no.CD 3070 maintained by Indira Trading, Bombay. Again on the same date another amount of Rs. 1,50,00,000/- was transferred to this account no.CD 2638 from CD account no.3032 maintained by M/s Colman Trading, Mumbai. From these findings, it appeared that Rs. 3,00,00,000/- a part of Rs. 3,89,90,700/- being the amount of loan sanctioned by IDBI, Kanpur, was diverted back to M/s ATV Project India Ltd., as account no.CD2638 is maintained by M/s ATV Projects India Ltd. It clearly appeared that no crane was purchased from M/s VEL, but only paper transactions were made and documents/entries in the statutory register were manipulated showing the purchase of the said cranes and to secure loan from IDBI without receiving the new cranes. Further, the cra....
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.... correct on been checked and cross tallied with various documents e.g. purchase order and statements of various banks etc. I am not convinced with the logic given by the adjudicating authority. It is a settled law under the principles of natural justice that if the party is desirous to cross-examine the person whose statement goes against its interest, the opportunity for such cross examination ought to be provided to the party before passing the order. Tribunal has supported this position through several of its decisions. Even the Apex Court has confirmed, in the case of Arya Abhushan Bhandar Vs. UOI [2002 (143) ELT 25 (SC)], that non production of witnesses for cross-examination is breach of natural justice. In view of the same, I feel that the adjudicating authority has erred in law and this action of denying cross-examination without proper reasoning is not proper and his act of placing reliance on the statements of those persons who were not allowed to be cross examined despite of the specific request by the appellants is not correct in law. Even otherwise, I notice that the finding of adjudicating authority on this point is self-contradictory.&nb....
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....ion here that as regard the grounds taken by appellants no.-2 & 3, I feel that in view of the discussions in preceding paras wherein I have not agreed with the findings of the lower original authority, It is needless to specifically discuss the pleas taken by them, as even otherwise also, the merits of the case do not go against their interests. However, for the sake of clarity. I may specify that respective penalties on three appellants are not sustainable as the demand/allegation itself does not sustain. In view of the above, the impugned order is set aside in toto and all three appeals are allowed with consequentioal relief." 8. Being aggrieved, the revenue is in appeal before this Tribunal, on the grounds that the Commissioner (Appeals) have erred in allowing the appeal on the ground that the demand has been raised by the Department after four and half years after receiving the intimation under Rule 57 T, the same is time barred in terms of Section 11A of Central Excise Act, 1944 and secondly, a possible date for cross examination has not been given by the adjudicating authority. Under the principles of natural Justice, the opportunity for such cross examination i....
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....e cleared by VEL vide Invoice No.97 & 98 dated 15.12.1995 after payment of duty, which was also disclosed by VEL in its RT-12 return for the period Dec 95. Affidavit in this regard of then Manager (Legal) Shri Ashok Kumar Verma was also filed (Sub-Para (iv) of Page 3 of O-I-O); (ii) No proceedings were initiated by department against VEL, which shows that the fact off duty payment by VEL on clearance of four cranes and the disclosure of the same in RT-12 return of VEL is not disputed by the departments. (iii) At the time of visit of officers of DGAE, all the four cranes in question were found installed in the factory premises of ATV. (iv) Modvat credit was taken by ATV after fulfilment of procedural formalities including filing of declaration under Rule 57T and installation certificate. Once the invoices issued by VEL in respect of clearance of four cranes alongwith handling equipments were valid duty paying documents duly disclosed in RT-12 and the cranes in question were found installed in the factory premises of ATV, for use in manufacturing, then Modvat credit on such cranes cannot be denied. 2. Further, it is also not in dispute that the four cranes in question alongwith ....