TaxTMI 
TaxTMI 
2023 (3) TMI 690
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.... or through second stage dealers) on the basis of Central excise invoices issued by some non- existing/existing manufacturers. In an offshoot of the said intelligence, searches of factory premises of four manufacturers namely:- (i) M/s. Aditya Enterprises, Bokaro Industrial Area, Bokaro; (ii) M/s. A.S. Infratel P. Ltd., Chiragora, Samsan Road, Hirapur, Dhanbad; (iii) M/s. Shree Ram Engg. & Castings, Mango, Jamshedpur; and (iv) M/s. Ganesh Udyog Dhanbad were conducted. 3. Statements of (i) Sh. Sudarshan Singh, Prop. of M/s. Aaditya Enterprises, Bokaro Industrial Area, Bokaro and (ii) Sh. Dharmvir Kumar, Director of M/s. A.S. Infratel P. Ltd. Chiragora, Samsan Road, Hirapur, Dhanbad were also recorded under Section 14 of the Central Excise Act, 1944. 4. During the investigation, DGCEI also undertook searches of six (06) first stage dealers, namely; (i) M/s. Chakradhari Metal Co. Jamshedpur; (ii) M/s. Bajrang Steel Coal & Coke Traders, Jamshedpur; (iii) M/s. L.S Construction, Jamshedpur, (iv) Jai Mata Di Enterprises, Jamshedpur, (v) M/s. Hariom Steels Jamshedpur and (vi) M/s. Shiv Metalicks....
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....M/s Shree Ram Power and Steel Pvt Ltd. Trading Unit, Ramnagar (xi) M/s Jharkhand Steel Traders Bokaro, (xii) M/s. Nanak Ispat P. Ltd. Kharsawan, (xii) M/s Jai Maa Durga & Co Jamshedpur, (xiv) M/s Parmal Enterprises Jamshedpur and (xv) M/s K R Enterprises Adityapur 10. Investigations conducted by the DGCEI in respect of said 11 (6+5) first stage and 15 second stage dealers revealed that they had issued fake invoices on the basis of invoices shown to having been issued by the four (04) non-existent manufacturers as mentioned above and /or seven (07) existing manufacturers namely: (i) M/s. Tata Steel Ltd. Jamshedpur, (ii) M/s. Yazdani Steel & Power Ltd. Kaling Nagar, Growth Centre, Mantira, Jajpur, Odisha; (iii) M/s. Scanin Steel & Power Ltd. Raigarh, Chhattisgarh; (iv) M/s. Maa Shakambhari Sponge P. Ltd. Rourkela, Odisha, (v) M/s. Jai Balajee Jyoti Steels Ltd. Sundegarh, Orissa; (vi) M/s. M.S.P Sponge Iron Ltd. Village Haldiguana, Post- Gobardhanpura, District-Keojhar; Orissa; (vii) M/s Crackers India (Alloy) Limited. Deojhar, District- Keojhar; Orissa. 11. Besides above,....
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....1.2016 and on 26.12.2016. He was apprised of the statements made on behalf of the various dealers etc., and he agreed that the respective persons have admitted that they had not manufactured any excisable goods and also that they have neither purchased any goods from the manufacturer nor sold the said goods but only issued the invoices for passing on the CENVAT credit. He admitted that during the year 2013-14 to 2015-16 they availed the CENVAT credit of Rs. 68,99,809/- passed on the invoices issued by M/s Tirupati Associates. He also admitted the CENVAT credit has been wrongly availed by them and they have to reverse it but due to their economic condition they could not do so and reversed the amount of Rs. 2,03,000/- only. Similarly the statement of Shri Arun Kumar, General Manager of the assessee company was also recorded on 17.03.2016. After going through the statements of the dealers, he admitted that the CENVAT credit was not admissible on the invoices issued to them and agreed that they are liable to reverse the amount towards CENVAT credit but since their company was lying closed they were not in a position to deposit the same and promised to pay the same later. 14. That f....
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....ould not reverse the entire amount. These statements have not been retracted. The findings of the Commissioner (A) that if the MS Scrap are not supplied by the manufacturers and the dealers, it cannot be construed that MS Scrap were not received by the assessee and when duty payment on finished goods is accepted then it leads to evidence of receipt of inputs and its use in manufacture of finished goods have been alleged to be erroneous. The observations of the Commissioner that payment of full value of invoices was made through banking channels does not establish veracity of the claim of the assessee to the fact that they received the excisable goods under the invoices issued to them. The Commissioner (A) have arrived at contradictory findings particularly with reference to para 7.2 whereby he held that the invoices were issued fraudulently, but the same are not bogus or fake and therefore the CENVAT credit taken thereon is admissible. According to the revenue, the Commissioner (Appeals) has not considered the facts in proper prospective and have allowed the credit on the basis of fake invoices issued by various dealers. Revenue also relied on a recent decision of the Tribunal in C....
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....dealers including the Director and General Manager of the assessee company which were recorded during the course of investigation. The adjudicating authority also considered these statements in extenso to hold that the department has made out a case of inadmissible availment of CENVAT Credit fraudulently on the invoices without accompanying the paid goods. We find that during the adjudication proceedings the assessee requested for cross examination of the persons who made these statements, however, the same was rejected by the adjudicating authority as according to him no evidence has been used against the assessee behind their back as the Director and the General Manager was given ample opportunity to examine the evidences corroborated by the statements recorded by the DGCEI and it is only after perusing the statements placed before them that they gave their testimony and further admitted the facts of wrongly availing the CENVAT credit. In fact they reversed the CENVAT credit of Rs 2,03,000/- and also assured to pay the remaining amount towards the CENVAT credit. The adjudicating authority, therefore concluded that principles of natural justice have been satisfied. 21. During t....
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....) ELT 129] that such statements which have been recorded in the absence of cross examination in terms of section 9D of the Act are not reliable clearly applies to the present case. The law is also settled by the Apex Court in Andaman Timber Industries Vs. CCE, Kolkata, [2015(324) ELT 641], where it has been held that by 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 being violative of the principles of natural justice. The provisions have been held to be mandatory and have to be construed strictly. Reference may be made to the decisions in; (i) V K Bhuraria & Ors. Vs. CCEX, ST Udaipur(T Del) CCEx, Lucknow Vs. Premier Alloys Ltd. [2019(366)ELT 659 (HC All)], (ii) Jindal Drugs Pvt Ltd. Vs Union of India [2016(340)ELT 67(P&H)], (iii) Hi-Tech Abrasives Ltd. Vs CCE, Raipur (Chattisgarh HC) (iv) CCEx, Meerut Vs Parmarth Iron Pvt. Ltd. [2010 (260) ELT 514]. 22. We now consider the decision of High Court of Gujarat in CCEx, Ahmedabad. Vs Gujarat Cypromet Ltd. reported in [2017(345) ELT 520(Guj)] where the revenue....
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.... view of the foregoing, in my considered opinion, the conclusion reached by the ld. Member (Judicial) in these cases is correct and I concur with the same." 23. Similarly, in the case of Basudev Garg Vs Commissioner of Customs [2013(294) ELT 353], the High Court of Delhi was dealing with an appeal where the appellant sought for cross examination of the persons whose statements have been referred to in the show cause notice, by the Commissioner in the Order in Original and also by the Tribunal but the request was not acceded to, thereby he has been deprived of his right to cross examine the makers of the statements leading to violation of principles of natural justice. After referring to series of judgements including the judgment of the Apex Court in Swadeshi Polytex and Lakshman Exports the Court was please to remand the matter back to the Tribunal for a fresh consideration in the light of the observations and directions made therein. 24. In Unirose Textile Processors Pvt. Ltd. Vs CCEx, Pune [2006(201)ELT 265], where the West Zonal Bench of the Tribunal was hearing an appeal against the confirmation of the demand by the Commissioner, however as the relevant witnesses were no....