2017 (9) TMI 1061

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....SAL had only supplied invoices to various parties without supplying the goods. M/s.HSAL approached the Settlement Commission and settled their case by paying duty of over Rs. 24 crores and interest over Rs. 8 crores. One of the alleged recipient of the invoices issued by M/s.HSAL was the present respondent M/s.Steel Services. It is alleged that during 1.9.2003 to 20.8.2005, the respondent took Cenvat credit of Rs. 19,40,840/- on the basis of 33 invoices issued by M/s.HSAL. The demand of Rs. 19,40,840/- was confirmed by the adjudicating authority along with interest and penalty of Rs. 19,40,840/- under section 11AC and penalty of Rs. 19,40,840/- under Rule 15 of Cenvat Credit Rules, 2004. A penalty of Rs. 10 lakh was also imposed on Shri R.S....

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....o Jodhpur and Ahmedabad only. They have never transported any goods to stations other than these two stations. Further, Shri Vijay Kumar, Manager of M/s. Bedi Golden Transport Co. in statement dated 19/5/2006 said that they never issued any builty to M/s.HSAL for any place other than Jodhpur and Ahmedabad. Inquiries were conducted at the end of M/s.Komal Transport Co. having head office at 2887, Dharamsala Wali Gali, Old Sabzi Mandi, Delhi it was found to be residential premises. Shri Krishna Kumar Sharma residing in the said premises for last 25 years stated that he had any connection with M/s.Komal Transport Co. nor he knew any person of that company. So M/s.Komal Transport Co. was found no-existent. Also the owners of 2 trucks of M/s.Par....

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....tunity for cross examination of the witnesses was not granted to them. In this regard, he relied on the judgement of the Punjab & Haryana High Court in the case of Jindal Drugs-2016 (340) ELT 67 (P&H). In these circumstances, the statement of the transporter cannot be relied upon. 3.2. Further contention is that the department failed to give alternate source of materials. He also argued that in all 33 invoices, the department recorded the statement of transporter pertaining to 18 invoices. Hence, there is no basis regarding 15 invoices. He further contended that the payments have made through banking channels and transaction duly entered into account and the respondent paid duty on the final products after using the raw materials covered....

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....he case. So I don t intent to give any relevance to that." 6. I find that the above findings of fictitious nature of transfer taken of inputs recorded by the Ld. Commissioner (Appeals), is completely contradictory to his conclusion at the end of order that the inputs were actually received by the appellant and the department did not prove that inputs were not received in the factory, categorically . 7. In view of the above, I find that order passed by Commissioner (Appeals) is perverse in nature and is therefore liable to be set aside. 8. I also find that the provisions of Section 9D of the Central Excise Act, 1944 have not been followed by the adjudicating authority, which were required to be followed as per law at that time. It i....

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....rests of justice. (2) The provision of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court." 15. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant,for the purpose of proving the truth of the facts contained therein. 16. Section 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in ....

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....hat, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts." 9. Same view was taken by Hon'ble P&H High Court in the following cases and the respective adjudicating authorities were directed to re-adjudicated the show cause notices by following the procedure contemplated by Section 9D of the Act. (i) M/s Jindal Drugs Pvt Ltd Vs. UOI CWP No.12714 of 2016 dt. 21.06.2016 (ii) M/s Fine Aromatics Vs. UOI CWP ....