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2018 (1) TMI 350

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....y premises. The said officers recorded the statement of Shri. Ravi Prakash Gupta, General Manager (Commercial), Shri. K.K. Saxena, Manager (Commercial) and Shri Sandeep Agarwal, Managing Director of the appellant company on different dates. The said officers visited the factory of The appellant company on the basis of the information that the appellant availed the Cenvat Credit on the basis of invoices of input PVC Resin, issued by M/s. Kashish Products Impex Pvt. Ltd., Delhi (i.e. KPIPL), without receipt of the goods. A SCN dated 03.10.2017 was issued, proposing recovery of cenvat credit of Rs. 1,39,94,593/-wrongly availed and utilized by the appellant during the period from September 2002 to May' 2005. By the impugned order dated 16.09.20....

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....cate submitted written note of submissions alongwith case laws. 3. The ld. DR appearing for the Revenue reiterated the findings recorded in the impugned order. He further submitted that the Director of the Supplier Company has denied manufacture of the impugned goods. The transporters have denied having transported the said material. It is submitted that the Revenue had made thorough investigation on M/s. KPIPL and it was found that the supplier had issued the invoices for availing cenvat credit, without supplying the goods. The ld. DR also submitted the written note of submissions alongwith the case laws. 4. Heard both sides and examined the case records. 5. On perusal of the impugned order, we find that one M/s. Chemplast Sanmar Ltd., ....

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.... the contentions that they purchased the inputs and used it in the manufacture of the final products. The ld. Adjudicating authority observed that the appellant purchased only bills of virgin PVC compound from M/s KPIPL and the goods produced by the manufacturers of reprocessed PVC, which is otherwise exempted from duty. It is further observed that a manufacturer for profitability and viability would go for non-duty paid inputs available in the market. It is further observed that it was possible that the appellant has also gone for such material. 7. We are unable to accept such findings of the adjudicating authority for the reason that there is no material available on record to support the argument that the appellant procured the non-duty....

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....ssuance of cenvatable invoices for PVC compounds and master batches without actually dispatching the said goods. It was recorded that integrity of the supplier (KPIPL) is found to be unreliable and doubtful. In fact, we note that there is no detailed analysis of the defence made by the main appellant before the Original Authority. The findings are very cryptic. We note that it is necessary to have corroborative evidence with reference to the allegation that the main appellant not receiving physically the inputs. Apparently, the case is based on the role of KPIPL as a manufacturer and supplier of inputs. While denying the cenvat credit to the manufacturer of final products, it is necessary to show that the cenvatable inputs were never receiv....

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....y, during the impugned period, the main appellant did manufacture final products and cleared them on payment of duty. No examination of this aspect has been made either in the investigation or by the Adjudicating Authority. 7. We also note that based on the same set of investigations, the invoices issued to various other manufacturer, who were dealing with KPIPL in producing PVC compounds and master batches were questioned. In many cases, the proceedings were concluded by denying credits availed in such transactions. On appeal, we find that the Tribunal had upheld the appellant's plea regarding correctness of the credit availed. We take note of these decisions as recorded below:- 1. Tirupati Plastomatics Vs. CCE, Jaipur - 2016(335) ELT....

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....ral Excise officers recorded the statements of two employees and Director of the appellant company, who stated that they received the goods in their factory. At this stage, the investigating officer should have examined the records and documents including Cenvat accounts and not merely relied on the statement of the third party. The Tribunal in the case of Tejwal Dyestuff Vs. CC, Ahmedabd - 2007(216) E.L.T 310 (Tri. Ahmd.) observed as under:- "The receipt of these inputs in the factory premises of the assessee having been established, coupled with the fact that, as per the declarations and returns and other statutory record, the inputs were in fact used in the final products by the assessee, the lethargy of the Revenue Officers in not veri....