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2024 (9) TMI 1592
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....stated facts of the present case are that the appellants, a partnership firm, were registered with the Central Excise department as 100% EOU and were engaged in the manufacture of menthol crystal, menthol powder, menthone etc falling under sub-heading 2906.11 and distilled/rectified peppermint oil, distilled/rectified spearmint oil, distilled/rectified piperita oil, mint terpenes etc falling under sub-heading 3301.25.90. Smt. Veena Gupta (appellant no.2) has 42% shares and is the main partner of the firm and Shri Rajiv Kumar Gupta (appellant no.3) is the Manager of the appellant, on whom penalties under Rule 26 of the Central Excise Rules, 2002 have been imposed. 2.2 During the period of dispute i.e. April, 2007 to March, 2009, the appellant availed Cenvat Credit on the inputs, viz. rectified mentha oil, piperita oil, terpenes, and dementholized oil ("DMO" for short) purchased from the units located in the states of J&K, namely, (I) M/s. Mint Mates, Kathua (20 consignments); (II) M/s. Natural Herbal Products, Kathua (2 consignments); (III) M/s. Amarnath Industries (1 consignment); (IV) M/s. Maa Durga Ind. (2 consignments); (V) M/s. Jai Ambey Corporation (3 consignments); (VI) M/....
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.... goods as claimed had been received by the appellant in their factory; that the appellant had fraudulently claimed refund of Cenvat Credit under Rule 5 of the Cenvat Credit Rules, 2004; that the suppliers of inputs of Jammu and Assam were instrumental in passing on Cenvat credit fraudulently by issuing fake invoices to the appellant; and that the suppliers had shown bogus purchase of crude mentha oil from U.P. based commission agents and had not manufactured the goods allegedly supplied to the appellant. After following the due process, the ld. Commissioner has confirmed the demand along with interest and penalties. Hence, the present appeals. 3. Heard both the parties and perused the material on record. 4.1 The learned Counsel for the appellants submits that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law; and binding judicial precedents on the identical issue involved in arising out of the same investigation. 4.2 He further submits that the SCN had been issued on the basis of assumptions and presumptions, in the absence of any evidence, making a false case against the appellant. He further submi....
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....da Ind., etc. vs. CCE & ST, Chandigarh - Final Order No. 63193-63196/2018 in Appeal Nos. E/60916/2017, E/60002-60004/2018 (Tri. Chandigarh) • Arora Aromatics, Narbada Industries, V.S. Industries, etc. vs. CCE - Final Order No. A/71939-71959/2017-EX(DB) dated 01.11.2017 (Tri. Allahabad) • Marico Ltd. vs. CCE - 2020 (371) ELT 916 (Tri. -Chandigarh) • SKM Egg Products Export (I) Ltd. vs. CCE - 2016 (341) ELT 411 (Tri. Chennai) 4.4 He further submits that the Adjudicating Authority, overlooking and ignoring the incontrovertible documentary evidence of receipt inputs in the appellant's unit, as 'not cogent evidence', has held that the appellant had knowingly and willingly indulged in fraudulent availment of Cenvat Credit on the strength of fake Cenvat invoices against which no goods as claimed had been received by the appellant in their factory; and on the basis of assumptions and presumptions; the transporters had not responded to the summons/letters sent to them; the addresses provided by the transporters were incomplete; there was no manufacture of finished goods by the supplier-manufacturers; there could not be any question of transp....
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....regards penalties imposed on Smt. Veena Gupta, partner of the appellant and Shri Rajiv Kumar Gupta, Manager of the appellant on the ground that they were concerned with the transporting, removing, depositing, keeping, concealing, selling, or purchasing and dealing with offending goods, the ld. Counsel submits that the case made out against the appellants was that no goods had accompanied the invoices, therefore, the question of transporting, removing, depositing, keeping, concealing, selling, or purchasing and dealing with offending goods does not arise. Moreover, the language of Rule 26 of the Central Excise Rules, 2002 does not talk about any offending goods, instead it talks about dealing etc with goods liable to confiscation; therefore, penalties under Rule 26 ibid on the partner and manager of the appellant are erroneous and incorrect. 5. On the other hand, the learned Authorized Representative for the department reiterates the findings of the impugned order. 6. We have considered the submissions made by both the parties and perused of the material on record; and have also gone through the various decisions arising out of the same investigation conducted by the Commissio....
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....urer were allowed continue their activity by procuring inputs from UP based supplier and selling goods manufacturing to their buyer/appellant. During the course of investigation, itself shows that the allegation is only on the basis of the assumption and presumption, therefore, it cannot be held that the appellants were not manufactured the goods during the impugned period. Moreover, as per the report of Jurisdictional Commissioner to Chief Commissioner dated 21.05.2010 reveals as under: "5. Thus the officers of Meerut-II Commissionerate, instead of selecting the consignments where no excisable goods were manufactured/supplied, have generalized that all the purchases of crude Mentha oil by these Mentha units located at Jammu were bogus units, these units did not have any infrastructure to manufacture the said products, were nonfunctional and Transporters who did not turn up for tendering statements were declared non-existent etc. however, on close scrutiny of the records, the following facts emerges: (i) Most of the consignments of raw material were found entered at the Toll barrier. (ii) The Officers of District Industry Centre, who have assessed and fix....
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.... period of investigation itself, the appellant continued their activity by procuring inputs from U.P and selling the goods after manufacturing to the U.P based buyers and the Department allowed to continue the same during the course of investigation which shows that the allegation on the basis of investigation conducted at the end of Commissioner of Central Excise, Meerut is not sustainable that the appellant is not manufacturer the goods. Admittedly, duty is payable on the manufacture of goods and as per the report of the Commissioner of Central Excise, Jammu dated 25.02.2010, it has been revealed as under: "5. Thus the officers of Meerut-II Commissionerate, instead of selecting the consignments where no excisable goods were manufactured/supplied, have generalized that all the purchases of crude Mentha oil by these Mentha units located at Jammu were bogus units, these units did not have any infrastructure to manufacture the said products, were nonfunctional and Transporters who did not turn up for tendering statements were declared non-existent etc. however, on close scrutiny of the records, the following facts emerges: (i) Most of the consignments of raw materia....
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....ive inputs on which they availed Cenvat credit basically on the contention of Revenue that M/s Ruchi Infotech System, Jammu did not have facility to manufacture the inputs received by M/s Arora Aromatics and that the goods did not move from Jammu & Kashmir to the appellants factory and therefore, Cenvat credit was not admissible. The evidence submitted by the appellant in the form of Order-in-Original passed by Commissioner of Central Excise, Jammu on 31/03/2008, wherein it was held that M/s Infotech System, Jammu was manufacturing the goods was not accepted by the Original Authority stating that the said Commissioner, Jammu did not see himself that the goods have been manufactured. If such a logic is accepted then the basic system of assessment by Authorities under tax statute needs to be concluded to have been not properly understood by the Adjudicating Authority. The present system of assessment in Central Excise is record based. The Officer assessing the duty is not required to be present when the goods are being manufactured to witness the process of manufacture. The adjudication is to be done on the basis of evidence produced before the Adjudicating Authority. As per Evidence....
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.... unit in the state of Jammu & Kashmir is entitled for benefit of the exemption Notification No. 56/2002-CE dated 14.11.2002 and claimed the refund of duty paid through PLA. In view of this, we set aside the impugned order and allow the appeal with consequential relief if any." 12. We also take a note of the fact that in the case of M/s Narbada Industries as well as M/s Aar Bee Industries, this Tribunal has entertained the issue and held that they are Jammu based manufacturer of the goods in question, therefore, they have rightly paid the duty and consequently the appellant M/s Sangam Aromatics is entitled to avail cenvat credit on the goods cleared by the Jammu based manufacturer. 13. In view of the above analysis, we hold that the Jammu based manufacturer were manufacturer during the impugned period and paid the duty on the goods manufactured by them. Consequently, the cenvat credit can't be denied to the recipient of goods located in the State of U.P i.e. M/s Sangam Aromatics. We also held that the allegations against the appellants are based on assumption & presumption which is not sustainable. In view of above, no penalty is imposable on the appellant....
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....n received the inputs from M/s Ruchi Infotech System, Jammu or the other suppliers of inputs. Further, the additional evidence submitted by the appellant indicated that in respect of units in Jammu, Central Excise Officers visited the factory premises and seen that the manufacturing process going on was evidence by them and such evidences being on record and submitted by the appellant it was the duty of the Original Authority to accept them and not to discard by saying that the Officers have not seen the goods being manufactured by their own eyes. Further, the receipt of inputs was verified by the Officers of Central Excise Department and sample of the same were also drawn and forwarded for Chemical Examination. Such evidence was also not accepted by the Original Authority, Therefore, it appears that the Original Authority was pre-determined to adjudicate the matter in the manner in which he has decided the issue and he was not just and fair and did not discharge his duty as an independent adjudicator. We, therefore, set aside both the impugned Orders-in-Original dated 29/01/2010 & 29/03/2011 and allow all the appeals filed by appellant. The appellant shall be entitled for conseque....