TaxTMI 
TaxTMI 
2022 (3) TMI 983
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Appeal No. E/10693/2017 against Order-In-Original Revision Order-V-CH-72-15-01-RSL-DGCEI-ADJ-COMMR-2013-14 dated 05/01/2017. Being aggrieved with the denial of request of cross-examination of Director and employee of the Company. All these appeals are taken up together for disposal since they are arising out of same investigation and involved the identical facts. For the sake of convenience, the brief facts are as under: 1.1 M/s Rajputana Stainless Ltd. are engaged in the manufacturing of Stainless Steel Billets, Bright Bars, Rounds, Flats etc. They are availing the benefit of Cenvat credit facility. During the investigation, it was found that they had availed the cenvat on old and used plates obtained from breaking of ships and also SS Cold Rolled Patta Pattis /flat and other scrap. Statements of persons including Director & employees of appellant's company were recorded. Inquiry had been extended to suppliers and transporters who had issued invoices and transported the goods respectively. The DGCEI undertook investigation and came to the conclusion that Appellant have wrongly availed the Cenvat Credit on the strength of Invoices of SS Cold Rolled Patta Patti / SS Flats , SS ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gations of department are that materials namely SS Patta, SS Angle, SS Cold Rolled Patti, SS Coil, SS hex, SS Square, SS Bright Bar, SS Flat are finished goods themselves and are not manufactured for further melting for manufacturing of SS Billets are baseless as arose out of misunderstanding of process of manufacture of above products. All the above products are emerged by process of Hot Rolled or Cold Rolled of Billets or Wire Rods. At the time of rolling certain miss- roll or reject or short length products are also emerged and the same cannot be sold in to the market as finished products. Though the same are looks like finished goods. The said rejects are sold under the same nomenclature to scrap-melters for melting process as the same cannot be used for further production and needs to be converted into Billet again for further processing. The department has not considered that Appellant has manufactured 44,696MT of Finished Goods by using raw material to the tune of 52,157 MT during the impugned period. The allegation of department if assumed to be true that the appellant have not received the alleged quantity of input to the tune of 15,804MT then the Appellant could not have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also relied upon the statements of the some persons who have not been offered for cross examination and they have been examined by the original adjudicating authority on the back the Appellant's advocate. Such reliance on the evidence which is recorded on the back of the Appellant is unsustainable as per ratio led down by the Hon'ble Apex Court in the case of Anil Chemical and Industries Ltd. reported in 2005 (183) ELT A31 (SC) and in the light of Judgment of Hon'ble Tribunal in case of Metro (India) Woodcrafts Pvt. Ltd. Vs CCE, Patna reported in 2016 (333) ELT 418. 2.3 In respect of Appeal No. E/10693/2017-DB he submits that in the present matter show cause notice was issued to the appellant only on the basis of the Statements so recorded without establishing that the appellant have procured the material without cover of invoice. Thus the impugned show cause notice is only based on the statements without adducing any corroborative evidence. In the aforesaid facts appellant moved an application for cross-examination. The Original Adjudicating authority allowed the cross-examination of the manufacturer suppliers under whose cover of invoices the material were received by the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Pvt. Ltd. Vs. Commissioner of Customs - Order No. M/4394/15/CB dated 17.08.2015 • Jindal Drugs Pvt. Ltd. Vs. UOI 2016(140) ELT 67 (P&H) • Arya Abhushan Bhander Vs UOI- 2002 (143) ELT 25 (SC) • Swadesh Polytex Ltd. - 2000(122) ELT 641 (SC) 2.6 He also submits that it is settled preposition of law that for the purpose of relevance of statement as evidence, Section 9D of Central Excise mandates cross examination of person whose statement is relied upon, otherwise the said statement cannot be relied upon in the proceedings. Not allowing the cross -examination it tantamount to breach of provisions of Section 9D of Central Excise Act, 1944. He place reliance on the following judgments in support of this contention. • Mahek Glazes Pvt. Ltd. Vs. UOI 2014 (300) ELT 25 (Guj) • Wellsuit Glass & Ceramic Pvt. Ltd. vs. CCE 2014 (304) ELT 618 (Tri. Ahmd) • PMS Int. Pvt. Ltd. Vs CCE 2014-TIOL-1669-CESTAT -DEL • J & K Cigarettes VS CCE 2011 (22) STR 225 (Del) • Basudev Garg Vs CC - 2013 (294) ELT 353 • Swiber Offshore Construction Pvt. Ltd. - 2014 (301) ELT 119 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. - (1) The CENVAT credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service [or in the premises of the job worker, in case goods are sent directly to the job worker on the direction of the manufacturer or the provider of output service, as the case may be] : RULE 9. Documents and accounts. -(1) The CENVAT credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :- (a) an invoice issued by - (i) a manufacturer for clearance of - (I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer; (II) inputs or capital goods as such; (ii) an importer; (iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....02 or the Service Tax Rules, 1994, as the case may be, are contained in the said document : Provided that if the said document does not contain all the particulars but contains or the details of duty or service tax payable, description of the goods or taxable service, assessable value, Central Excise or Service tax registration number of the person issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service, and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit] (4) The CENVAT credit in respect of input or capital goods purchased from a first stage dealer or second stage dealer shall be allowed only if such first stage dealer or second stage dealer, as the case may be, has maintained records indicating the fact that the input or capital goods was supplied from the stock on which duty was paid by the producer of such input or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... said half year to the jurisdictional Superintendent of Central Excise, not later than the last day of the month following the half year period.] [(11) The provider of output service, availing CENVAT credit referred to in sub-rule (9) or the input service distributor referred to in sub-rule (10), as the case may be, may submit a revised return to correct a mistake or omission within a period of sixty days from the date of submission of the return under sub-rule (9) or sub-rule (10), as the case may be. 4.1 We note from the above rules, that credit can be taken on the basis of Invoice after the inputs covered by such Invoice is received. It is important that goods covered by the invoices are received by the manufacturer. In the facts of the present case we find that the appellant have received the goods on duty paying documents and recorded the receipt of the goods in their raw material account and cenvat account i.e. RG-23A-Pt. I and Pt. II and the said disputed inputs used in manufacture of dutiable goods. The purchase of the goods under the invoices in question were booked in books of account. The payment against the said invoices were made through cheque. On the abov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....duty but also of penalty and in many cases, it may also lead to prosecution. The provisions contained in Section 9D, therefore, has to be construed strictly and held as mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is required to be admitted in the interest of justice. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he two questions of law accordingly, stand answered in that manner. 4.3 The approach of the Ld. Adjudicating Authority is not only serious violation of principle of Natural Justice, which was stressed by the ld. Advocate before us, but shows unfair bias on part of the Adjudicator. The impugned order suffers from the vice of denial of Principle of Natural Justice as held by various decisions of courts. 4.4 In the present matters, the case of revenue also on the ground of transporters' admission that the goods were not supplied to the appellant and according to their statements the vehicle number shown in invoices are not capable of transporting the goods. During the Cross- Examination the transporter has clearly stated that the goods have been delivered to the appellant. We find that the appellant have recorded the receipt of the goods in their raw material account i.e. RG-23A-Pt. I and Pt. II and the said disputed inputs used in the manufacture of dutiable goods. It is also not the case of the department that the appellant have procured some unaccounted inputs to cover up the quantity of input shown in the invoices. There is no evidence that the inputs shown in the invoices r....