TaxTMI 
TaxTMI 
2018 (12) TMI 1178
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....pertaining to purchase of copper ingots/scraps on high sea sales basis from M/s. MM Enterprises, Chennai without the actual receipt in their factory of manufacture at Patancheru in A.P. and their consumption in the manufacture of finished goods. Resultantly, it is also alleged that the fraudulently availed CENVAT credit based on those Bills of Entry and utilized the same for payment of duty on their finished goods. The details of same are as under: Sl. No. Bill of Entry No. Date 1. 753222 30-11-2004 2. 810170 25-02-2005 3. 984363 03-10-2005 4. 995676 17-10-2005 5. 607198 27-10-2005 6. 684093 15-09-2004 7. 690506 28-09-2004 8. 350388 03-11-2004 9. 361098 12-04-2005 10. 369392 10-08-2005 11. 607941 28-10-2005 12. 868396 17-08-2006 2.2 It is alleged that in respect of the Bills of Entry mentioned at Sl. No. 1 to 5 above, the consignments were cleared at Nhavasheva Port, Mumbai through the CHA M/s. Reliance Overseas Services, delivered to M/s. Indo Aryan Central Transport at Turbhe Railway Container Yard and diverted to Tughlakabad, New Delhi. This allegation is sough....
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....howing transport from Mumbai to Hyderabad was issued by M/s. Oriental Logistics, which is admitted by Sri. Chaglani, Proprietor who deposed that only LR/consignment notes were issued without undertaking actual transportation of the goods. Verification of financial records i.e. Carriage Inward Account of M/s. Cubex has revealed that no transport charges are booked for the impugned Bill of Entry. 2.4 As regards the Bills of entry no from 6 to 11 detailed in the table supra, the case of the investigation is that M/s. Oriental Logistics & Cargo Carriers, Chennai have only issued consignment notes without undertaking actual transportation of the goods. Sri. Kaiser Chaglani, Proprietor of the firm vide his statement given under Section 14 of the Central Excise Act admitted to the fact that only consignment notes were issued on the request of Sri. Mahish Mardia of M/s. MM Enterprises. This is corroborated by the fact that in respect of Bill of Entry No. 607941 dated 28.10.2005 consignment note Nos. 133 & 134 dated 23.11.2005 were issued, whereas there is no evidence of payment of freight charges by M/s. Cubex to M/s. Oriental Logistics. Further, investigations carried out at Federal Ba....
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....he driver. Sri Chandrabhan Singh has further elaborated that Rs. 10,750/- shown as advance was the amount he had charged from Cubex for delivery upto Bhiwandi. In the Bill No. 114/06-07 dated 26.08.2006 of M/s Reliance Air-Sea Services, only Rs. 10,750/- was charged for transport. In the LR No. 037 dt. 24.08.2006 of M/s Sai Cargo Movers, total freight amount is shown as Rs. 28,600/- out of that Rs. 10,750/- was shown as advance and balance amount of Rs. 17,850/- is shown amount to be paid to driver. As seen from the voucher C 1555 dt 31.08.2006 of Cubex, an amount of Rs. 17,850/- in cash was shown as paid to M/s Sai Cargo Movers. No receipt for this payment is available in the records of Cubex. Evidently, no material was transported against the LR No. 037 dt. 24.08.2006 of M/s Sai Cargo Movers. The Adjudicating Authority after following due process of law and allowing to cross examination of three persons, came to a conclusion that main appellant herein has availed ineligible CENVAT credit, of the CVD paid on imported goods as per the Bills of entries (mentioned herein above) without receipt of the materials, confirmed the demands raised along with interest and also imposed pena....
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....s is not in due. It is his further submission that the Adjudicating Authority in the impugned order has summarily brushed aside the submissions made by main appellant as to in the absence of such huge quantity of scarp, as indicated in the allegation, the main appellant could not have manufactured of final products and cleared the same without payment of duty. He draws our attention to the procurement of scrap which according to the Revenue was not received and submits that correspondingly, there is no findings as to how during the period in question appellant had manufactured and cleared the final products. He would rely on the following decisions: Commissioner Vs. Motabhai Iron and Steel Industries [2015 (316) E.L.T. 374 (Guj.)] Motabhai Iron & Steel Industries Vs. CCE, Ahmedabad-II [2014 (302) E.L.T. 69 (Tri.-Ahmedabad -II)] Akshay LPG Valves Vs. CC & CE, Hyderabad -IV [2016 (337) E.L.T. 129 (Tri.-Hyd.)] Krebs Biochemicals & Industries Ltd., Vs. CCE & ST, Visakhapatnam [2017 (352) E.L.T. 261 (Tri.-Hyd.)] SM Energy Teknik & Electronics Ltd., Vs. CCE & ST, Vadodara - II [2015 (328) E.L.T. 443 (Tri. - Ahmd.)] It is his submission, in view of the above, the decided....
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....heir LRs, Copy of Lorry Challans, IWBs of CONCOR and Money receipt with regard to receipt of their payment as a proof of booking the cargo to Delhi it proves that the goods were sent to Delhi instead of Hyd. (III) Report of CONCOR Turbhe railway container yard • On the basis of details submitted by Sri. Omprakash Jhangra, further details were called for from M/s.Concor and from the report submitted by Terminal Manager, CONCOR, Turbhe Railway Container yard vide letter dt 24.05.2008 (Annexure -B/3 to SCN) it is found that in respect of Bill of Entry No. 984363 dt 03.10.2005, Container No. PMLU2025194 of Copper Scrap is received in Turbhe Yard through vehicle No. MP09KC1968 which was loaded in Container No. CSQU3062479 with seal no. 829178 on 06.10.2005 under IWB No. 541670 for dispatch to TKD (Tukhlaghabad). • In respect of Bill of Entry No.607198 dt 27.10.2005, it is observed that as per Terminal Stuffing Register, 29 bags of Copper Scrap was received at the terminal through vehicle No. MH04H396 which was loaded in container no.ILCU5036047 with seal no. 830142 on 12.11.2005 under IWB No.542039 for dispatch to TKD (Tukhalghabad). • In respec....
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....e appellant has produced two different sets of consignment notes. E.1. Issued by M/s.Oriental Logistics and Cargo Carriers. Sl. No. BE. No. Date CN. Nos Vehicle no. consigner From To 1 684093 15.09.04 71A 20.09.04 TN 22AB 1010 Fair Deal Enterprises Chennai Hyd 2. 690506 28.09.04 73A 07.10.04 TN 27AL 1310 -DO- Chennai Hyd 3. 350388 03.11.04 78A 15.11.04 TN 27AL 1310 A.M.Ahamed& Co. Chennai Hyd 4. 361098 12.04.05 103 22.04.05 TN 22AB 1010 A.M.Ahamed& Co Chennai Hyd 5. 369392 10.08.05 115 19.08.05 TN 22AB 1016 A.M.Ahamed& Co. Tuticorin Hyd • On the basis of the statements from Sri Kaiser A.Chaglani, Prop of M/S Oriental Logistics and Cargo Carriers, given on 28.05.2008 & 30.05.2008 (attached as Annexure A-20& A-21) and records submitted it is found that all the above consignment notes were issued on request of Sri Manish Mardia and in the above cases wherever freight amount shown in the consignment notes was received by cheques the same was returned in cash to Sri Manish Mardia after realization of cheques. E.2. In respect o....
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.... Vehicle No. Report of the Commercial tax department. 1 684093 dt.15.09.2004 71A dt.25.09.04 TN 22AB 1010 NO (112) 2 690506 dt.28.09.04 73A dt.07.10.04 TN 27AL 1310 NO(111) 3 350388 dt 03.11.2004 78A dt. 15.11.2004 TN 27AL 1310 NO(111) 4 361098 dt 12.04.2005 103 dt. 22.04.2005 TN 22AB 1010 NO(110) 5 369392 dt. 10.08.2005 115 dt.19.08.2005 TN 22AB 1016 NO(109) 6 984363 dt.03.10.2005 124 dt.05.10.2005 TN 22AB 1016 NO(108) 7. 984363 dt 03.10.2005 125 dt.0510.2005 TN 22AB 1010 NO(107) 8 607941 dt.28.10.2005 133 dt.23.11.2005 TN 22AB 1016 NO(106) 9 607941 dt.28.10.2005 134 dt 23.11.2005 TN 22AB 1010 NO(105) 10 868396 dt.17.08.2006 37 dt.2408.2006 HR 38H 5695 NO(104) • Further enquiries made with the Regional Transport Office Meenambakam at Alandur, Chennai 600016, with regard to vehicles numbers provided by the appellant, it is submitted by the Transport Officer, Meenambakkam vide his letter No.B7/070504/2009 dated 17.07.2009 that no vehicle was registered under Registration No.TN22AB 1016 and the vehicle registered under ....
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....appellant, consignment note/LR should have been there and more importantly transportation charges should have been booked and shown in carriage inward A/c of the appellant. • Further in respect of following consignment notes Sl. no. Consignment not. BE NO. 1. 124 & 125 dt.05.10.2005 984363 dt 03.10.2005 2. 133 & 134 dt.23.11.2005 607941 dt.28.10.2005 • For the first consignment note freight amount was paid in cash, but the amounts are not reflected in the bank statement of m/s. Oriental logistics and cargo carriers. In the case of second consignment there is no evidence of payment of freight charges to the transporter in the carriage inward account of M/s. cubex. • The appellant has issued cheques for amounts of Rs. 20,700/-(chq. No.44743), Rs. 20,500/-(chq no.44742), Rs. 20,500/-(Chq.no.44741) to the transporter on 1.07.2005 which were credited to the account of the transporter on 22.07.2005 and on 23.07.2005 Rs. 60,000/- was withdrawn. It is pertinent to note that Sri.Chaglani in his statement dated 30.05.2008 has categorically deposed that wherever freight amounts as shown in the consignment notes was received by ....
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....ment was made to the Oriental. H. Burden of proof cast on the Appellant not discharged. Department had raised a presumption against the appellant and has produced substantial evidence and conclusively proved that the goods have not received into the factory. The appellant could not produce any cogent evidence either with regard to the goods imported through Mumbai or through Chennai and Tuticorin, to substantiate their claims. In the given situation the Original authority had considered all the details minutely and rightly held the order against the appellant. In view of the above submissions, it is prayed that the Hon'ble tribunal to up-hold the order of original authority in its entirety by dismissing the appeal of the appellant." 5. He relies upon the decision of this Bench in the case of Binjusaria Metal Box Co. Pvt. Ltd., Vs. CCCE, Hyderabad- IV Final Order No. A/30823-30824/2018 dated 03.08.2018 to submit that if the vehicles are not capable to transport the loads that it is enough to indicate that appellant had not received the inputs. 6. The Learned Senior Counsel in rejoinder submits that in so far as consignments that came from Chennai, Tuticorin enumera....
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.... reproduced: "53. While it is argued by M/s Cubex that there was no evidence that the imported consignments were not received in their factory, it is found that, as detailed in paras supra, the investigation has come up with overwhelming evidence in support of the contention that the consignments were diverted and no material pertaining to the impugned Bills of Entry was received in the factory. On the contrary, it is found that M/s Cubex could not come up with an even an iota of evidence that the goods were indeed received in the factory of manufacture and put to use. It has already been clearly brought out in the preceding paras based on the statements recorded from various related individuals supported by corroborative evidence that the documentations on which the defence have been harping are fake and created for the sole purpose of taking credit fraudulently. Arguments such as no manufacture could have been possible but for the receipt of the goods, are of no relevance in the instant case where the fraud perpetrated by the notice(s) is comprehensively proved. Further, in this regard, it would be pertinent to refer to the show cause notice issued to M/s. Cubex vide F. No. DG....
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....of M/s. Oriental Logistics at the time of cross-examination that the driver might have changed the number plate of the vehicle with the ulterior motive to steal the material is ludicrous and can be attributed to afterthought." (emphasis supplied) It can be seen from the above reproduced paragraph No. 53, the entire case of the Revenue and the Adjudicating Authority while holding against the main appellant is on statements recorded of individuals, it is also recorded that corroborative evidence documentation on which defence for availing CENVAT credit was not produced. As it can be seen from the above reproduced paragraph of the Adjudicating Authority, he has not brought on record in the findings portion, how he has come to a conclusion that there were purchases of bazar scrap and the same was unaccounted; there is nothing on record to indicate the investigation was taken up with scrap dealers. In our view, there seems to be no evidence in any form to indicate purchases of unaccounted bazar scrap. As regards the registration number of vehicle mentioned, document indicated was of a Bajaj pulsar motor cycle, we notice that Counsel for main appellant has correctly pointed out tha....
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....and. 11. Further we find that reliance is placed more specifically on the statements of Shri Kaiser Chaglani, Shri Manish Mardia and Shri Chandrabhan Singh to hold against main appellant. On perusal of the records of cross examination conducted before the Adjudicating Authority, it is noticed that all the three individuals have categorically stated that statements were not voluntary and the said statements were prepared, they were directed to sign the same; it is also noticed that investigating officer was present during the cross examination, was permitted to re-examine the individuals; he exercised the right, but nothing incriminating came out of such re-examination of individuals. It is settled law, if the statements were denied being voluntary during the cross examination, reliance cannot placed on those statements unless there is corroborative evidences. Further, it is noticed that the individuals who were handling business activity of the main appellant i.e., Shri PR Bhandari, Shri U.M. Bhandari, Shri Virendra and Shri Surendra Bhandari, had not given any statement which is inculpatory in nature to indicate CENVAT credit was availed without receipt of any materials. In the....