TaxTMI 
TaxTMI 
2018 (8) TMI 1275
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....AT Credit in the guise of transfer of material/ goods from their Gurgaon unit to Bhiwadi unit while no actual transaction of goods had taken place, officers of the Preventive Branch of Central Excise Division, Bhiwadi visited the factory premises of the assessee situated at 521-22, RIICO Industrial Area, Chopanki Bhiwadi on 28. 6. 2008. On examination of records of the assessee, it was observed that they have availed CENVAT Credit to the tune of Rs. 36, 43, 618/- (BED 35, 37, 491/- +Ed. Cess Rs. 70, 749/- + Sec. & Hr. Ed. Cess Rs. 35, 318/-) against fifteen invoices issued by one of their own unit namely M/s S Pal Enterprises (Pvt. ) Ltd., 378-379, Phase-IV, Udyog Vihar, Gurgaon (as detailed in Annexure-A to the show cause notice). It was further gathered by the officers that their Gurgaon unit was also engaged in the manufacture of similar goods and was holding Central Excise Registration No. AAECS1246FXM001 at Gurgaon which they had surrendered in the month of June 2007. 4. Counsel for the appellant Mr. Kinshuk Jain submitted that Tribunal has committed serious error in not appreciating the facts recorded by the First Authority wherein it has been held as under:- "Efforts were....
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....in any permission from Central Excise, Gurgaon in terms of Rule 10 of in CENVAT credit Rules, 2004 as required for transfer of capital goods Raw Material/Finished goods etc. In fact after said transfer of goods, they applied for surrender of registration on 15. 6. 2007 which was accepted on 18. 2. 2008. In the instant case the assessee has not followed above procedural requirement and have claimed to have removed the goods as such on voice, for the reasons. best known to them. " 5. He has also taken us to the conclusion reached by the authority which reads as under:- "(xiii) It is also incorrect to state that their unit in Gurgaon had worked for more than 13 years with an unblemished record because at Gurgaon also they were found to have been indulged in fraudulent availment of CENVAT credit without actual transaction of goods for which they were penalized & recovery of Credit was ordered. The clinching fact in this entire exercise is the showing of charging of Rs. 12, 000/- as detention charges by the transporter. If the assessee's version of actual transportation of the goods on 10/1107. 2007 is taken to be correct, where is the need for charging detention charges by the tr....
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....on the request of the appellant. He has in fact confirmed that goods were not transported under cover of the GRS given by him to the appellant. Even Sh. Kuldeep Sharma, Employee of M/s Sai Ram Logistic Pvt. Limited (i. e. that transporter) has in his statement confirmed preparation of only the GRs, that too from a different set of GR book, as per directions of Sh. Kalra only to facilitate the appellant. The fact that the GRs relevant for showing transportation of the impugned goods have been prepared from a separate set of GR books and the fact that all the copies of the GRs were prepared deliberately for manipulation purposes only and were not used for transportation of the goods. Sh. Shishu Pal Garg, Director of the appellant's Unit in his statement has also confirmed that the goods were not loaded as per the dated & time of removal given in the invoices. I also found it strange that factory is being shifted from one location to another and the Director is not aware how and when the goods are moved, when and how the invoices were prepared, which trucks were used, when the goods were actually received. The Director of the company saying that they did not have any documentary evide....
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....ven before actual receipt of the goods in the factory premises? It is obvious that the entire activity done by the appellant was for availing irregular credit deliberately with a malafide intention. The Hon'ble Apex Court's judgments in case of CCE NEW DELHI vs HARI CHAND SHRI GOPAL (2010 (260) and CCE, JAIPUR Versus PAGHUVA (INDIA) LTD. reported at 2000 (118) E.L.T. 311 (S.C.) are squarely applicable in the instant case. " 7. In support of his contention, he relied on the following decisions: (i) In Collector of Central Excise, Jaipur vs. M/s. Raghuvar (India) Ltd., 2000(118)E. LT. 311 wherein it has been held as under:- 14. The above conclusion of ours is itself sufficient to answer the question in favour of the Revenue and against the manufacturer, even dehors the applicability or otherwise of the principle of construction - Generalia specialibus non derogant, since they do not operate on the same field or cover the same area, to be reconciled in order to avert any clash or inconsistency. That apart, even if it is to be assumed that they relate to one and the same nature of demand from the manufacturer of any amount due from him to the State, the provisions containe....
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....ne whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the noncompliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted....
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....asily discounted ; (c) Certain duty paid inputs have in fact been cleared to some buyers as such. There has been no verification to check up the correctness of such transaction. In the absence of any allegation such transactions are to be admitted as correct and supporting the contention of the appellant at least partially ; (d) Regarding the stamp on the check post, it is noted that the inter-stage movement of goods have been recognized by the concerned Sales Tax Authorities and the assessment for the material period have been completed factoring the inter-stage movement of the impugned inputs to Bhiwadi unit ; (e) The denial of credit is mainly sought to be made on various purported discrepancies in the GR forms, date of invoices and actual receipt of goods in Bhiwadi unit. Though certain enquiries conducted by the Department raised certain suspicion in this case, there is no categorical conclusion to the enquiry through a finding that the duty paid inputs have been diverted to place other than their Bhiwadi unit or the production and other records of Bhiwadi unit do not reflect the correct position. Too many un-filled gaps in the case makes the proceeding before lower A....
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.... substantial with the conditions specified in Rule 10 of the CENVAT Credit Rules, 2004 in as much as they have shifted their factory from Gurgaon to Bhiwadi and the CENVAT Credit lying unutilized in their accounts at transferable to their new factory at Bhiwadi. iv). It was submitted that the input transferred to near unit at Bhiwadi were duly mentioned in the ER-1 Return for the month of May, 2007 filed Factory. Further, due intimation was given to the Assistant Commissioner, Excise Division I, Gurgaon. v). It has been alleged in the show cause notice that they did not obtain any permission from Central Excise, Gurgaon in terms of Rule 10 of the CENVAT Credit Rules as required for transfer of raw materials. In this regard, it was submitted that prior permission of Central Excise Department was nor required for transfer of Credit to new unit under Rule 10 (1) of the CENVAT Credit Rules. B. INPUTS DULY RECEIVED IN THE NEW FACTORY. (i) It was submitted that there was no substance in the allegation that the inputs were not received by their new factory at bhiwadi. It was evident from their records that inputs were in balance during the month of May, 2007 at the Gurgaon Factor....
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....y bhiwadi Factory. It was submitted that, therefore, the CENVAT Credit taken by them was legal. (vi) Reliance was placed on the following decisions:- * CCE Vs Shakti Roll Cold Stripe Pvt. Ltd, 2007 (80) RLT 267 (T-Del) * CCE Vs Neepaz Steels Ltd. 2008 (87) RL. T 463 (P&H) (vii). It was further submitted that in the present matter, the Transport Company is very much in existence and Shri Raj Kumar Kalra, Director of M/s Sai Ram Logistics Pvt. Ltd. had clearly stated in his statement dated 03. 07. 2008 that his Company was doing business with M/s S. Pal Enterprises who earlier had a factory at Gurgaon and thereafter they started a new factory at Bhiwadi. Shri Kalra has categorically admitted in his statement dated 03. 07. 2008 that they had transported goods May, 2007 from the assessee's Gurgaon factory to Bhiwadi factory. In views of such a statement which has not been controverted, it cannot be alleged by the Department that the inputs were not dispatched from Gurgaon factory and were received in Bhiwadi factory. (viii). It was further submitted that the entire show cause notice has been issued simply on the basis that truck numbers mentioned were not correct. It is s....
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....f check post, vehicle traffic registration number, the stamp of State Check Post on invoices does not appear to be genuine. In this regard, a perusal of letter dated 30. 03. 2012 of Commercial Tax officer Bhiwadi makes it very clear that this was a common practice adopted by Check Post not to mention the number of truck, etc as the instruction had been issued in the post to mention the number and to put signature. It wás, therefore, submitted that non-mentioning of number etc. was very common. Further it was not in the hands of the assessee or the Transport Company to get the number, etc. mentioned. If some department does not work properly and as per the instruction the charge of nongenuineness of the document cannot be levelled against them. Moreover, the Commercial Tax officer, Bhiwadi has not clearly mentioned in his letter dated 30. 03. 2012 that the stamp of Check Post was fake. He has merely ventured a guess that the stamp does not appear to be genuine as the number and signature were not given. It was requested that the stamp of Rajasthan State Commercial Tax Department put on the invoices may be checked again from the Commercial Taxes Department which would reveal t....
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....as such therefore the entry of all the materials cleared vide the invoice in question were entered in the R. G. I. register which was audited by the audit party as evident from the copy of R. G. I. register enclosed. It was further added that only Rs. 3440809/-. (33429589/- B. E. D, + Rs, 41220/- Edu, Cess) were lying in the R. G. 23A Pt. II whereas the assessee has paid a sum of Rs. 3646002/- on the aforesaid invoices i. e. a sum of Rs. 175193/- had been paid from the PLA. (xvii) Reliance was placed on the decision in the case of Hiren Aluminium Ltd. Vs CCE. 2009 (92)RLT 706. 12. He contended that cross-examination of the commercial person was denied. In that view of the matter, he relied on the following decisions of the Supreme Court: (i) Andaman Timber Industries vs. Commissioner of C. Ex., Kolkata-II 2015(324) ELT641(S. C. ) wherein it has been held as under: 5. According to us, not allowing the Assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because ....
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....an appeal before the Commissioner (Appeals) who vide order dated 15. 12. 2004 allowed the appeal of the assessee observing that the Adjudicating Authority has passed the order only on the ground that the vehicles used for transporting the inputs were not capable of transporting the goods in question and as such, it has been presumed that the Modvat credit has been taken without actual receipt of the inputs and that the said ground is not sufficient to deny the Modvat credit to the appellant by presuming that no inputs have been received by the appellant. 5. We have heard Mr. Kamal Sehgal, learned counsel for the revenue and perused the record. However, we find no force in the contention raised by him. The Tribunal has recorded a finding of fact that the inputs supplied by the respondent were duly received by the manufactures and were used in the goods manufactured, which were cleared on payment of duty. The Tribunal also found that the Department has not been able to prove that any other alternative raw material was received and used in the final products. The Tribunal also held that the findings of the C0mmissioner(Appeals) in favour of the respondent were not challenged by the ....