TaxTMI 
TaxTMI 
2024 (12) TMI 894
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.... is Bad in Law: 1.01 The order passed by the Learned Pr. CIT u/s 263 is bad in law and liable to be quashed. It is submitted that it to be held so now. 1.02 On the facts and circumstances of your appellant's case as well as in law, the ld. Pr. CIT has wrongly assumed jurisdiction u/s 263 of the Act in respect of Value Added Tax (VAT) of Rs. 45,07,004/- involved in purchases of SS Scrap which your appellant had never claimed as expense. Ld. Pr. CIT also erred in not appreciating the fact that the ld. AO has dropped the proceedings u/s 154 of the Act after verifying the details and information and explanations submitted by your appellant. 1.03 On the facts and circumstances of your appellant's case as well as in law, the ld. Pr. CIT has wrongly set-aside the order passed by ld. AO in totality and directed to make fresh assessment though the order passed u/s 143(3) r.w.s. 147 of the Act by the ld. AO is found erroneous in respect of one aspect only. 2.00 Your appellant craves leave to add, alter and / or amend the grounds herein above raised." 3. The brief facts of the case are that in the case of M/s. Panchmahal Steel Ltd., the assessee filed it....
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....in the claimed purchases. Drawing parallels to the Malabar Industrial Co. Ltd. case, Principal CIT held that failure to investigate relevant aspects of the financials rendered the assessment order erroneous and prejudicial to the revenue's interests. Ultimately, Principal CIT held that due to the lack of comprehensive inquiry and the erroneous nature of the original assessment, the order under Section 143(3) of the Act was liable to be set aside. The Assessing Officer was instructed to conduct a fresh assessment, ensuring all relevant elements were duly considered and that the assessee was provided a reasonable opportunity to present their case. 4. In appeal before us, the assessee submitted that the entire controversy and basis of proceedings initiated under Section 263 of the Act, against the assessee centered around a show cause notice dated August 28, 2014, from the Central Excise Directorate indicating that the assessee had claimed Cenvat credit of Rs. 4,37,07,420/-, which was disallowed. The Counsel for the assessee submitted that now the entire controversy relating to proceedings initiated by the Central Excise Directorate in the assessee's own case has been decided i....
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....llant, wherein it transpires that most witnesses have either stated that they do not remember the details of the transaction or that the statements did not correctly bring out the factual matrix involved, leading to the evidentiary value of the oral evidences to be diminished. In certain occasions, the contradicting stand taken by some witnesses in first retracting their statements and then during the course of later proceedings stating that they mistakenly retracted it, leading to strong suspicion on the genuineness of the manner in which the statements were recording and entire investigation was done. 6.8 Just as the above case of SS scrap, even in case of MS scrap, there is no allegation or proof of flow back of amounts by anyone to the Appellant as well. There is no evidence of procurement of domestic scrap in cash from open market as well. There is no evidence of sale of duty paid scrap by Dealers in question, to any third party in cash as well. The factum of duty paid goods being cleared by manufacturers and receipt of proper invoice by the Appellant are not in dispute as well. 6.9 The 9078 MT of MS scrap was procured by the dealers and as involved in the pr....
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....ant Ltd., and Bold to second stage dealers and few companies. He has unequivocally stated that he used to cut the above goods and sell as per customers requirements. That he had said goods to second stage dealers such as M/s. Sree Vishnu Steels and M/s. Lakshmi Traders, Department has heavily relied upon the statement of ShriK. Veluswamy of M/s. Sree Vishnu Steels and Shri V. Aananthan of M/s. Lakshmi Traders contending that these two have stated that Shri Periakaruppan had sent only invoices without goods. However, Shri A.Periakaruppan, denied the statement of thesetwo persons and categorically reiterated that he had sent the goods (HR coils and HR sheets) only along with cenvat invoices after having cut them to size as per the requirement of the customers. We find however that while the lower appellate authority in para 4.4 of the impugned order has taken note of the statement of ShriA.Periakaruppan, however, the assertions given by that person has been brushed aside on the ground that it was just an argument after a long time gap to counter the version made earlier. It is also relevant to note that the said Shri K. Velusamy had, through his statement dt. 18.11.2006 read with his....
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....from the manufacturers, after cutting them to size as was reauired by SR/PL. We are not able to understand how the department, in the present case, has differed with the stand that was taken in the earlier proceeding and further why statements of A.Periakaruppan have not been relied upon or made part of the SCN. At this juncture, it would be worthwhile to reproduce para-3 of CESTAT Final Order No.946-947/2005 dt. 06,07.2005 in the earlier proceedings as under: "3. The immediate question before me is whether M/s.SR/L are entitled to avail Modvat credit on the cuttings of plates, sheets etc. Supplied by SCPL It is not in dispute that these are cuttings of plates, sheets etc. falling under heading 72.08. The Revenue has no case that the thickness of the plates, sheets etc. was reduced in the activity of cutting. Obviously, the cutting process resulted in reduction of area only. Though thickness is a parameter relevant to classification of these goods under Chapter 72 of the CETA Schedule, area is irrelevant. Sheets, plates etc. Classifiable under heading 7208 are so classifiable in reduced area also. Hence the cuttings supplied by SCPL to SRIL cannot be treated differently fr....
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....ought to be covered in the SCN are beyond the normal period of limitation. Although extended period of limitation has been invoked we are not able to appreciate how there can be an intent to evade payment of duty considering that the major chunk of their final products of these appellants were exported. Appellants have stated that they have not benefited otherwise by taking any irregular credit as alleged by the department. The proviso to Section 11 A (1) would be attracted when there is suppression of facts with intent to evade payment of duty. The department has no case that appellants utilized the alleged wrongly availed credit to discharge duty liability. There is no evidence coming forth in this angle. The contention of the id. AR that the intention to evade payment of duty need not be proved lacks any legal basis. 13. It would be appropriate to draw inference from the Hon'ble Supreme Court in the case of Cosmic Dye Chemical Vs CCE Bombay -1995 (75) ELT 721 (SC) holding that it is not correct to say that there can be suppression or mis-statement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of proviso to Section 11A (l) of t....
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....iated by the department which have resulted in the appeals filed by SRIPL Unit I & II and other co-noticees are not only hit by limitation for the predominant period covered in the SCN, but more particularly cannot be sustained on merits. This being so, the impugned orders are set aside. Assessee s appeals NO.E/390/2009, E/367/2009, E/368/2009, E/378/2009, E/219/2010, E/205/2010, E/206/201Q & E/216/2010 are allowed with consequential relief, if any, as per law. 16. For these very some reasons, no merit is found in the department appeals No.E/189/2010 &E/297/2010for which they are dismissed." 6.12 It was held in the case of Coimbtore Super Alloys (P) Ltd. 2019 (5) TMI 213 - CESTAT CHENNAI that: "5.2 Be that as it may, the allegation is that appellants had received only non-duty paid MS scrap but had taken cenvat credit based on invoices of all the dealers in which supply of actual duty paid inputs like CR, HR, CR sheets etc. had been indicated. These allegations have been concluded primarily based on the statement dated 07.11.2008 of one Shri G. Baskaran, Proprietor of Sri Amman Steels who voluntarily stated that actual goods supplied to appellants were nothing but....
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....was due to the fact that appellants had mentioned commercial invoice number and date in the register whereas the department had compared the same with central excise invoices issued by dealer; that apart from this, in their register, appellants had entered the materials received from all the dealers as MS scrap, whereas dealers had mentioned the description as per their purchase invoices. 5.7 It is not the allegation that appellants had only received "fake invoices" without having made any payment towards the amounts billed in such invoices. Per contra, id. Consultant has contended that the appellant had paid the supplier of raw material by way of cheque, including the excise duty element. 5.8 The id. Consultant has also raised a very pertinent argument that there is no allegation that materials supplied to the appellants had not suffered central excise duty. In the absence of any samples of the materials drawn at the time of search/investigation, there is no evidence to support the allegation that appellants had only received locally procured scrap instead of CR, HR, CR sheets etc. as indicated in the input invoices. We also find that no investigation hove been d....
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....ill from such dealers without receipt of any goods and denied the allegations that he had insisted for Central Excise invoice from scrap supplier for non-duty paid goods. 5.11 Earlier in these discussions, we had flagged the lack of clarity from the facts on record as to the actual percentage of the total input invoices that were fauna to have discrepancies. In this regard, we find from para 18 of the 010, that during the personal hearing held on 20.03.2011, the Consultant for the appellants had contended that the disputed credit worked out to only 10% and that there was no requirement on the part of appellants to take any erroneous credit. In our view, this averment has lot of implications. When the investigations have found discrepancies in only 10% of the invoices examined for o disputed period of 17 months between June 2005 and November 2006, that too on the basis of o sale statement which also has been subsequently denied by the person concerned, and in the absence of any samples of inputs drawn for corroboration, the allegation that appellants had received only locally procured scrap instead of CK, HR, CR sheets ere. in the input invoice, will not have any legs to st....
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....ame to be passed on a later date on 08.12.2023 and therefore, at the relevant time there was no infirmity in the order passed by PCIT. In this connection it would be useful to refer to the case of CIT vs. A. Yonus Kunju 228ITR 147 (Kerala). The brief facts of the case are that the assessment of the assessee for 1979-80 was completed on November 2, 1982, at an income of Rs. 18,82,700/-. Thereafter, under section 69A of the Income-tax Act, 1961, an addition of Rs. 20,99,440/- was made with reference to an unaccounted investment of 3,852 bags of raw nuts. Information about the existence of unaccounted possession of raw nuts was available from the State Bank of Travancore where the assessee had credit facilities on the pledge of the stock of raw nuts and in regard thereto there was an excess of 3,852 bags in the records of the bank. The assessee had shown 18,507 bags of raw nuts to the bank for enjoying credit facilities whereas it had shown 14,655 bags in the return of income, that is to say 3,852 bags less. During the pendency of these original proceedings, on April 24, 1979, there was a surprise raid by the Sales Tax Department, Intelligence Wing and it was found by the Sales Tax De....
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....e for the Income-tax Officer to turn round and reject the explanation of the assessee which was accepted by the sales tax appellate authority as regards the arrival of goods in the Asramom godowns and Ayathil factory. The reason is that the sales tax appellate authority has found that the delivery notes produced by the assessee before him were relevant material which satisfactorily explained in a majority of cases the arrivals in these branches. Therefore, relevancy of the delivery notes in the context of the explanation of the assessee cannot be brushed aside lightly. The arrivals in the Ashramam godowns and Ayathil factory have been accepted by the sales tax authorities to have come from the head office purchases and represented the branch transactions. Therefore, it cannot be said that the assessee's explanation remained unsubstantiated." 29. In view of the above position it must be stated that the material was on the record of the proceedings and when we are required to deal with both the proceedings of assessment as well as levy of penalty it is next to impossible to see the situation in a blind-folded manner. The observations found quoted in the notice under Sect....