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2019 (1) TMI 315
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....ey persons were recorded. Also, office premises of Appellant Unit situated at Wire Rod Mill Division of M/s Prakash Industries Ltd was searched by the officers. The officers seized pencil written ledgers containing raw material purchases and also unaccounted sales details of finished goods as well as traded goods. Besides the above diaries maintained for recording of orders from customers, despatches of finished goods, weighment slips, cash transactions, acknowledgment of payments to raw material suppliers and other documents were also seized. Statement of Shri Ajay Kumar Singh, Sr. Assistant of M/s Prakash Industries Ltd, who was looking after the work of maintenance of records of the Appellant in his statement dated 21.5.2013 stated that he is maintaining day-to-day party-wise pencil written ledgers of material purchases in cash and by cheque and also maintaining party-wise ledger account of cash sales of manufactured/traded goods as well as goods sold on bills. That all the ledgers were written by pencil. Shri Ajay Kumar Singh also stated that procedure of maintenance of ledgers. He also named suppliers of raw material and buyers of finished goods. Statement of Shri Ravindra Sin....
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....rmed on the ground that the Appellant did not receive the goods under prescribed challans under the Cenvat Credit Rules, 2004, for job-work done for M/s Jai Ambe Wires and other units. Hence, the present appeal. 4. Ld. Counsel, Shri Manish Saharan, appearing for the Appellant submits that the demand of 20706 MT of HB Wires/Winding Wires has been made on the basis of a Chart detailing the entries found in pencil written ledger. He submits that when the pencil written ledgers itself were not legible, in that case the rewritten ledgers on computer and calculation of demand prepared on the said basis, is itself not sustainable. Shri Ravindra Singh in his cross examination dated 8.9.2016 had clearly stated that the pencil written entries were seized from the premises of M/s Prakash Industries and he does not remember whether he was questioned by the Officers regarding the same. That the Charting detailing the said pencil written ledgers were not his document, but was prepared by the Department and he has not cleared any goods without payment of duty. All the clearances were made on payment of duty. He does not know who has prepared the computerized ledger on the basis of such pencil ....
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....that the Appellant has made any clandestine removal. The Show Cause has not given a single evidence of goods being cleared clandestinely by the Appellant. There is no evidence of any unaccounted raw material received by the Appellant manufacture of alleged clandestinely cleared goods, reference/dated/document as to when the alleged buyers received the goods from the Appellant. There is no single transport document which can show the removal of the goods to the alleged buyers or receipt of consideration from the buyer. That cross examination of the buyers was also sought but was denied and thus no opportunity was granted to the appellant to cross-examine the veracity to the statement of alleged buyers. No single evidence of production of goods was found, or use of labour was found. That alleged ledger entries on the basis of which the clandestine removal was alleged was hand written with pencil and not legible. The same was re-written in spite of the fact that when the entries were not legible, it was not possible to rewrite ledger and prepare list on the basis of such entries, the said ledger was not seized from the factory of the appellant but was seized from alleged office locate....
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....t a single transport document or evidence of transportation of such huge clearance is available. There is no corroborative evidence to substantiate the charge of clandestine removal. As regards clearance by 8 parallel invoices, he submits that the invoices were photocopies, which were not even seized from their premises, but were received by the Department from some unknown source. He submits that there are no buyers for the said 8 parallel invoices, allegedly issued by the Appellant. That the officers prevailed upon Shri Ravindra Singh-Proprietor of the unit to state that the goods were cleared on such parallel invoices. However, the statement of Shri Ravindra Singh stands retracted in his cross-examination and hence cannot be relied upon. He relies upon the judgment of the Hon'ble High Court of Delhi in case of CCE, Del-I v/s Vishnu & Co. Pvt. Ltd., - 2016 (332) ELT 793 (Del) to support his contention. As regards the demand of job work activity undertaken by the Appellant without adopting the job work procedure, he submits that the no receipt of prescribed challen cannot lead to demand of duty as there is no dispute about the job work. He also submits that the Revenue did not asc....
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....on, the demand cannot be made against the Appellant unit. Our views are also based upon the judgment of Hon'ble High Court of Delhi in case of Commissioner of Central Excise Delhi-I Vs. Vishnu & Co. Pvt. Ltd. 2016 (332) E.L.T. 793 (Del.). We further find that no corroborative evidence has been brought on record to show transportation or procurement in the form of bilty receipts or goods receiving note by the recipient of the goods. We find that once the pencil written ledger entries were not legible, it was not possible to re-write the ledger and prepare ledger on the basis of such entries. Further, no statement of the supplier of the raw material has been recorded to show that the raw materials were supplied to the Appellant unit for manufacture of finished goods. There is no statement of the person who has received any consideration on account of supply of raw material in case from the Appellant unit, neither there is transport document showing transportation of raw material alleged to have been used in the manufacture of the clandestinely cleared finished goods by the Appellant. No evidence in the form of manufacture of finished goods, use of any extra power, extra labour or use....
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....Court is unable to find any justifiable reason for the Department to deny the respondent the opportunity of cross-examining the persons who made statements against the respondent during the course of the investigation. This was all the more necessary since the statement made by Mr. Varun Gupta and other noticees during investigation stood retracted by their subsequent affidavits. Unless the makers of the statements were not available for some reason, there was no justification to simply deny the right of cross-examination. 22. In this connection, it is necessary to refer to Section 9 D (1) (a) of the CE, 1944 which incorporates the rule of natural justice. The relevant portion of the said provision reads thus: A "(1) statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains- (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence....
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....cross-examination of "such a large number of persons was granted it would have taken the case to a non-ending process." This cannot be a justified reason within the meaning of Section 9D of the Act to deny that opportunity to the Appellant. 46. The CCE also wrongly proceeded on the basis that there was no right of cross-examination overlooking the fat that Section 9D of the Act restricts the grounds on which the cross-examination can be denied. It also overlooks the decision of the Supreme Court in Swadeshi Ploytex Ltd. V. Collector of Central Excise - 2000 (122) E.L.T. 641 (S.C.) and Laxman Exports Ltd. V. Collector of Central Excise - 2002 (143) E.L.T. 21 (S.C.) to the effect that when a statement is used against an Assessee an opportunity of cross-examining the persons who made those statements ought to be given to the Assessee." 47. In GTC Industries Limited V. Collector of Central Excise, New Delhi - 1997 (94) E.L.T. 9 (S.C.), the Supreme Court has frowned upon the practice of the adjudicating authority looking into allegations contained in another SCN to return a finding against the Assessee." 25. For all of the aforementioned reasons, the Court finds that the impugn....