TaxTMI 
TaxTMI 
2019 (4) TMI 650
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....Act, 1944 (for short, Excise Act) and Cenvat Credit Rules, 2004 (for short, Credit Rules). The Revenue has also filed appeal against the said order to the extent of dropping of the demand of Rs. 98,29,800/- in respect of said two other Noticee M/s Maa Beri Steel Company, Jodhpur (for short, M/s MBSC) by the ld. Adjudicating authority and also against setting aside of the other portion of the order regarding dropping of penalty and also considering the imposition of penalty on M/s MBSC and Shri Sanjay Jain, their proprietor of the appellant. 2. The brief facts of the case are that the main appellant (M/s Synergy Steels Ltd.) is engaged in the manufacture of hot rolled stainless steels flats/billets etc. Billets are used entirely for captive consumption in the manufacture of SS flats/billets etc. Shri Subhash Chander Kathuria (the other appellant in this case) is the Managing Director of the main appellant company. M/s Jai Bhawani Concast Pvt. Ltd. (for short, JBCPL) is a consignment agent and dealer of the appellant company located at New Delhi and Shri Raman Bhatia is a Director therof. M/s MBSC is a dealer of the appellant company located in Jodhpur and Shri Sanjay Garg is prop....
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....lso the raw materials/inputs used in the manufacture of finished product by the appellant was purchased from local scrap supplier in cash. 2.2 In the adjudication order demand in respect of sales made through consignment agent, M/s JBCPL, was confirmed to the extent of Rs. 40,76,894/- instead of Rs. 45,15,387/- on account of a typographical error in the show cause notice. However, the adjudicating authority dropped the demand of Rs. 98,29,809/- in respect of goods sold to the dealer, M/s MBSC, Jodhpur, due to inadequate evidence. The adjudicating authority also confirmed demand of Rs. 8,58,107/- in respect of shortages detected at the time of stock taking of Rs. 79,87,489/- was confirmed along with the penalty on the appellant company and penalty of Rs. 15 lakhs on Shri Subhash Chander Kathuria, MD. 3. The department is also in appeal against the dropping of the demand of Rs. 98,29,809/- against MBSC. 4. The main appellant has filed the appeal on the grounds: 4.1 that the whole demand of Rs. 40,76,894/- is based on the evidence of third party seized from the residence of Shri Raman Bhatia and the statement of Director of JBCPL. It is an established law that the third pa....
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....e goods, which has not been done in this case. This makes the demand in correct and illegal. 4.4 It was also submitted that Shri S.C. Kathuria, Managing Director of the appellant company, in his various statements, recorded by the DGCEI officer, has categorically denied the averment of Shri Raman Bhatia, and other person. He was also confronted with the documents seized from the residence of Shri Raman Bhatia, wherein, he has stated that M/s JBCPL was not their exclusive agent and purchasing SS flats from various other manufacturers and selling them in the market. It was also categorically stated by Shri S.C. Kathuria that he has not received any cash from M/s JBCPL towards the sale made by the appellant company. It was also submitted by him that the main appellant has not dealt with Shri K.K. Jain and receiving any money from him on behalf of the main appellant was also categorically denied. 4.5 He, therefore, submitted that perusal of the documents seized from residence of Shri Raman Bhatia do not even remotely suggest that he was dealing with the main appellant as a consignment agent, as there is no mention of main appellant's name in any of the documents seized by the DGC....
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....ese third party documents, unless these are independently corroborated. It was categorically submitted by Shri S.C. Kathuria, that the inputs at the strength of which the Cenvat credit were procured from M/s JBCPL and Alka Creations and the payments were made by cheque. In the circumstances, there is no question of issuing any directions or instructions to Shri Raman Bhatia to procure the inputs without documents and transport thereof to the appellants factory. DCGEI never examined M/s Industrial Importers, M/s Hindustan Tin Works, M/s Derby Overseas Pvt. Ltd. and M/s N.F. Impex Pvt. Ltd from whom Shri Raman Bhatia has allegedly purchased inputs and sold the same to the appellant as the first stage dealer. It was submitted that neither any driver nor transporter, who transported these goods were ever summoned or examined in support of allegation that the inputs have not been transported to the appellant factory. It is the submission of the learned Advocate that these goods were loaded from the premises of M/s JBCPL and were duly accompanied by GRs along with the name of consignor, that is M/s JBCPL. These invoices were also accompanied with Form VAT-47 from the Sales Tax department....
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.... for the manufacture of SS flats. Hence, conclusion drawn by the ld. Adjudicating authority is completely erroneous and not sustainable. Even if it is held that there was a shortage of billets, the same would not amount to clearance of finished goods without payment of Central Excise duty. As there is no case of clandestine removal, duty demand of shortage is erroneous. Reliance was also placed on case laws in the case of: (i) Beco Industries Ltd. Vs. CCE, Jamshedpur - 2000 (121) ELT 650; (ii) Pacific Granites Ltd. Vs. CCE, Jaipur - 2001 (128) ELT 421 (Tri.-Del.) (iii) Commissiner of Central Excise, Allahabad Vs. IOC Ltd. - 2014 (300) ELT 153 (Tri.-Del.); (iv) Commissioner of Central Excise & Service Tax, Ludhiana Vs. Anand Founders & Engineers - 2016 (33) ELT 340 (P&H). In any case the percentage difference of shortage was only to the extent of 1.78% which is as per the permissible limit in accordance with Second Schedule to the Standard of Weight and Measures (Packaged Commodities) Rules, 1997. 8. Regarding the penalty imposed on Shri Subhash Chander Kathuria, the Managing Director of the appellant company under Rule 26 of the Central Excise Rules, 200 2 read wi....
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.... evidence, the Commissioner has confirmed the demand through M/s Jai Bhawani Concast (P) Ltd. He should not have adopted a different view for different dealers. The department has prepared a chart enclosed As 'Annexure B' to the appeal to show that the value arrived at on the basis of private documents, are the same for both the entities i.e. M/s JBCPL and M/s MBSC. Since the demand in respect of M/s JBCPL has been confirmed the same should have been done in case of M/s MBSC. However, it is the submission of learned Advocate that no such the Annexure B is enclosed with the appeal. Adequate opportunity was given by the Bench to produce this Annexure, but the same was not produced. It was also submitted by learned Advocate that sales done by M/s JBCPL and M/s MBSC cannot be compared as those are different entities and had different market, which varies from one place to another. The department appeal, as per learned Advocate, is based on price of SS flats sold by the appellant to M/s MBSC, which were higher than the sale price of SS flats by other manufacturers at Jodhpur, which indicated that sale price was not correct. This ground is not acceptable as the market for the product are....
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.... the procedure as prescribed under Section 9D of the Central Excise Act for placing reliance on the various statements recorded from the various persons, who were either the consignment agent/dealers/supplier of the goods. It is also stated earlier that no reliance can be placed on the third party evidence, without independent corroboration as has been done by the adjudicating authority. In holding so, we place reliance on the following cases : (i) Rhino Rubber Pvt. Ltd. Vs. CCE - 1996 (85) ELT 260 (T); (ii) Rama Shyama Papers Ltd. Vs. CCE - 204 (168) ELT 494 (T); (iii) Badri Industrial Metal Pvt. Ltd. Vs. CCE - 2000 (245) ELT 539 (T); (iv) Sri Sidhi Ispat Ltd. Vs. CCE - 2017 (357) ELT 724 (T). 15. Regarding the availment of Cenvat credit we find that the adjudicating authority has denied the credit without following the decision of Hon'ble High Court of Allahabad in the case of Juhi Alloys (supra). We also find that although names of the various supplier of these inputs/raw materials were available with the investigators, however, they have not been examined and merely the credit have been denied to the appellant. Further, we also find that no statements or any tran....