TaxTMI 
TaxTMI 
2025 (6) TMI 841
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..... The brief facts of the case are as under:- (i) The Appellant No.1 is engaged in the manufacture of blooms, billets of alloy, non-alloy and stainless steel, bar and rods of stainless steel, hot and cold rolled coils/strips, etc., falling under Chapter 72, articles of iron and steel falling under Chapter 73,.articles of copper falling under Chapter 74, and electric transformers falling under Chapter 85 of the CETA. (ii) The appellant No.2 and 3 are the commission agents who claims to have cleared Nickel Alloy of M/s J V Industries on high sea sale basis. (iii) The Appellant No. 4, 5 and 6, 7 and 8 (collectively referred to as "Commission Agents") are engaged in the trading of metals namely, SS scrap, copper scrap, ferrous metal as well as non-ferrous metals and alloys on commission basis for the manufacturers of such goods. (iii) (a) The Appellant No.9 is Director of the Appellant No.1. (iv) During the relevant period, the Appellant No. 1 placed purchase orders with the Commission Agents for supply of copper nickel alloy ingots for its use as an "input" in the manufacture of their dutiable final goods i.e., stainless steel. On the basis ....
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....during the investigation, the following statements were re-corded under Section 14 of the Excise Act: S. No. Name of the person whose statement is recorded Date of the statement 1. Shri Ravi Aggarwal, Managing Director at Agsons Agencies Pvt. Ltd. 10.1.2008 and 31.3.2008 2. Shri Tabarak Ansari, Representative of KS Enterprises 9.1.2008 3. Shri Rajesh Kumar Singhal, Director of M/s KS Enterprises 27.2.2008 and 29.4.2008 4. Shri Pradeep Kumar, Authorized Signatory of M/s National Udyog and of M/S BR Jindal Udyog 9.1.2008 and 20.3.2008 5. Shri K.K. Gupta, Director of M/s Siddhartha Bronze Products Private Limited and M/s Khushboo India (P) Ltd. 23.5.2008 (ix) On the basis of the aforesaid statements, the Department formed a view that all the consignment agents received goods other than copper nickel alloy ingots from JV Industries and the same were sold to the Appellant under the cover of invoices. showing description of the said goods as copper nickel alloy ingots. (x) In view of the above, the officers of Central Excise Commissionerate, Rohtak extended the investigation to the Appellant No. 1 and visi....
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....ules, 2002. (xiv) In response, the Appellant No. 1 vide an interim reply and final reply dated 13.6.2011 rebutted every allegation of the SCN submitting, inter alia, that the witnesses whose statements had been relied upon by the Department in the abovesaid SCN must be cross-examined in terms of Section 9D of the Excise Act. (xv) The Ld. Commissioner, Central Excise, Rohtak without appreciating the submissions made by the Appellant vide Order-in-Original dated 30.08.2011, confirmed the demand of recovery of Cenvat Credit along with interest and penalties observing that Appellant No. 1 had wrongfully availed Cenvat Credit on copper nickel alloy ingots as the goods of the said description were never received by the Appellant as the manufacturer i.e., JV Industries itself did not receive nickel in its factory premises for manufacture of copper nickel alloy ingots. Being aggrieved, the Appellant filed appeal before the Hon'ble CESTAT, New Delhi challenging the said order. (xvi) This Tribunal vide Final Order No.A/52510-52522/2015-EX[DB] remanded the matter to the Adjudicating Authority for de novo adjudication after affording cross-examination of the per....
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....ckel alloy ingots to Appellant No. 1 as per the description mentioned in the invoices, however, the goods were not physically verified by them. Further, he confirmed the statement of Shri Tabarak Ansari dated 9.1.2008 wherein he deposed that they did not deal in copper nickel alloy ingots. • During cross-examination, he clarified that his statement dated 27.2.2008 was correct except for the portion where he confirmed the statement of Shri Tabarak Ansari. The same fact was brought to the notice of the Department vide letter dated 28.2.2008. • It is undisputed that KS Enterprises received copper nickel alloy ingots from JV Industries and sold the same to Appellant No. 1. • Further, the statement of Shri Tabarak Ansari could not be relied upon as the same was retracted. 4. • Shri Rajesh Kumar vide statement dated 29.4.2008 stated that they receive any good other than copper ingots/copper items. Further, he stated that he did not bother about the description of the said goods as they were working on commission basis • During the cross-examination, he stated that his statement dated 29.4.2008 was pre-typed by ....
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....was also stated that he had retracted his statements by addressing letters to Assistant Commissioner, AR, New Delhi dated 10.1.2008 and 20.3.2008. • In view of the retraction and record of cross-examination, reliance placed by the Department on the statements to allege non-receipt of invoiced goods by Appellant No. 1 is improper and unsustainable. (xviii) In compliance to the remand directions of the Tribunal, New Delhi, Ld. Commissioner, CGST, Delhi-East Commissionerate granted an opportunity of personal hearing to the Appellants on 17.5.2019 and 6.6.2019. After perusal of the reply dated 15.10.2018 and additional submissions dated 7.6.2019, the Ld. Commissioner disallowed the Cenvat Credit to the Appellant No.1 as well as to JV Industries and ordered for its recovery along with interest and penalty. Further, the impugned Order confirmed the imposition of penalties upon Appellant No. 2 to 9. (xix) It is pertinent to mention that JV Industries settled their matter by filing a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. (xx) Being aggrieved with the impugned Order, the Appellants filed the present appeal on th....
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....Switchgear Ltd., 2008 (229) E.L.T. 485 (S.C.) • M/s Sapphire Papers Mill v. Commissioner of Central Excise & Service Tax, Siliguri, Service Tax Appeal No.4 of 2010 dated 14.7.2023 • CCE v. Juhi Alloys Ltd., 2014 (302) E.L.T. 487 No reliance can be placed on the inculpatory statements of the witnesses to provide non-receipt of nickel, and consequently, non-manufacture of copper nickel alloy ingots. (v) The present proceedings were initiated against the Appellants by relying upon the inculpatory statements of the personnel of JV Industries and the Consignment Agents to allege that JV Industries never received nickel, hence, they did not manufacture copper nickel alloy ingots and therefore, Appellant No. 1 had never actually received copper nickel alloy ingots in its factory. (vi) It is pertinent to mention that pursuant to the remand directions, the Department conducted a cross examination of the witnesses. A brief summary of the cross-examined the statements of the witnesses has been reproduced at Para (xvii) above and the same have not been reiterated here for the sake of brevity. Upon perusal of the said statements, it is apparent tha....
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....djudication of the SCN is detrimental to the interest of the Appellant and is in violation of the principles of natural justice. Reliance is placed on the following decisions wherein the impugned Orders were set aside for the reason that adjudication was not completed within the prescribed time limit: • Kopertek Metals Pvt. Ltd. v. Commissioner of CGST (West), New Delhi, 2024 (12) TMI 269 - CESTAT New Delhi • Swatch Group India Pvt. Ltd. & Ors. v. Union of India, 2023 (8) TMI 864 - Delhi High Court Extended period is not invokable; penalties are not imposable and interest not recoverable. (xi) It is submitted that vide the SCN, demand was raised for the period from July 2005-April 2005 by invoking the extended period of limitation under the proviso to Section 11A(1) of the Excise Act read with Rule 14 of the CCR, 2004. It is submitted that the entire demand falls beyond the normal time limit of 1 year and is time-barred, thus the impugned Order is liable to be set aside. (xii) It is the department's case that the Appellant suppressed the information regarding non-receipt and non-consumption of copper nickel alloy ingots in the manufact....
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.... CCE v. HMM Limited, 1995 (76) E.L.T 497 (SC). (xv) As regards the penalties imposed upon the Commission Agents, it is submitted that Rule 26 of the Excise Rules is applicable only to natural persons and not to juristic persons. Further, the ingredients required for imposition of penalty under Rule 26(1)ibid, viz. (i) dealing with the excisable goods, and (ii) knowledge or reason to believe that the goods are liable to confiscation under the Act or the Rules, are absent in the present case. Reliance is placed on Steel Tubes of India Ltd. v. CCE, Indore, 2007 (217) E.L.T. 506 (Tri.-LB. As regards Rule 26(2) ibid, it is submitted that no penalty can be imposed under the said provision as the same did not exist prior to 1.3.2007. (xvi) In any case, when it stands established that Appellant No. 1 has correctly availed Cenvat Credit on goods supplied by the Commission Agents, thus no penalty can be imposed upon them. (xvii) In view of above, the Appellants humbly prays that the impugned order passed by the Ld. Commissioner is not sustainable and is liable to be set aside, and the appeal filed by the Appellant is liable to be allowed in full, with consequential....
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....P as it (M/s JVIP) did not receive/use Nickel; also, it did not have the infrastructure facility to attain such high temperature to melt nickel, and that's goods supplied to M/s JSL were other than "copper-nickel alloy ingot: but the description mentioned in the invoices issued by JV was "Copper-nickel alloy ingot", on which M/s JSL availed CENVAT credit. (iii) Details of the supplies to M/s JSL during the investigation were found as : Dealer's Name Authorised person quantity CENVAT Credit (Rs) Agsons Agencies Pvt. ltd Ravi Agarwal, MD 434.191 2,84,65,193 K.S.Enterprises pvt ltd R.K.Singhal, Director 529.29 2,60,30,128 National Udyog Pradeep Joshi, Signatory 444.425 4,13,09,512 B.R.Jindal Udyog Pradeep Joshi 132.30 85,15,378 Siddharth bronze products pvt ltd K.K.Gupta, Director 326.397 2,31,95,68 Khusboo India (P) Ltd K.K.Gupta, Director 280.965 2,05,24,825 Total 2147.568 14,80,40,654 (iv) During the investigation, all the persons making a statement on behalf of the above dealers admitted to having supplied goods procured from the M/s JVIP to M/s JSL limited. They had ....
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....judicating Authority observed that M/s JVIP neither produced copper cathode nor cupro nickel tubes. Further, it needs to be clarified to M/s JSL what variation in the manufacturing process they had done away with the need for cupro-nickel alloy ingots after June 2007. It is a coincidence that M/s JVIP also stopped manufacturing copper-nickel and nickel ingots around the same time when the department initiated the investigation. (xi) Thus, M/s JVIP and M/s JSL were parties to a large conspiracy/ fraud. Thus, M/s JVIP issued CENVATABLE invoices by falsifying the description. The consignment agents also used false documents to supply goods to M/s JSL, knowing that the goods they supplied did not correspond to the description in the accompanying invoices. These false documents became part of M/s JSL's statutory records. They now claim a bonafide entry to claim inadmissible CENVAT credit because such false papers are never examined before the forgery comes to light. (xii) The Hon'ble Supreme Court in Commissioner of Customs (Preventive) Vs Aafloat Textiles (I) Pvt Ltd 2009(235) ELT 587 (SC) has laid down the principles that the fraud and collusion vitiate even the ....
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....customs, Calcutta (2005( 184 ) ELT 339 (cal) and on the appeal by the assessee, the Honorable Supreme Court dismissed such appeal.-2005(187) ELT A31 (SC)." (xv) It is an elementary principle of jurisprudence that legal fraud vitiates everything, even the judgment and orders of a court. Suppose a transaction has been founded on fraud. In that case, the vice will continue to taint it, and not only is the person who committed the fraud is precluded from deriving any benefit under it, but also who derive advantage of it." (xvi) A similar decision has been given by the Hon'ble Tribunal New Delhi in G.L. Metallica Pvt ltd Vs Commissioner of Central Excise, Jaipur-I 2010(262) ELT 995( Tri Del) and Shiv Enterprises Vs Commissioner of Central Excise & Customs 2015(322) ELT 703 (Guj). (xvii) The Apex Court Judgement about rebate in the case of Omkar Overseas Ltd 2003(156) ELT 167 (SC) is also relevant to the present case. The Hon'ble Court has, in unambiguous terms, held that rebate should be denied in cases of fraud. In Sheela Dyeing & Printing Mills (P) Ltd [2007(219) ELT 348 (Tri) Mum], the Hon'ble CESTAT has held that any fraud vitiates the transaction. Hon'ble....
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....ons required their specialised knowledge but only factual awareness. Statements were, therefore, voluntary and deserved full credentials. Denial of same during the cross-examination is false and does not deserve cognizance. (xxi) Also, the doctrine of the preponderance of probability firmly establishes the revenue's theory as neither M/s JVIP nor M/s JSL used nickel or Cupro nickel alloy in their respective factory after initiating the Departmental investigation in 2007. As the findings above show, M/s JVIP did not receive the nickel or use the same in their manufacturing process, and the duty passed on by M/s JVIP to M/s JSL through the consignment agents is irregular. The credit availed by M/s JSL is accordingly not admissible. (xxii) Rule 3 Of CCR.2004 allows a credit of a specified duty paid on any inputs received in the factory. Thus, credit is allowed only when the manufacturer receives input for use in or concerning the manufacture of the final product. Rule 4 allows credit to be taken immediately upon receipt of the inputs in the factory and not upon. receipt of the invoice. Hence, the Adjudicating Authority has correctly disallowed the CENVAT credit in th....
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....alties have been imposed on them on the ground that they have aided and unaided M/s J. V. Industries to avail inadmissible cenvat credit and M/s J. V Industries has opted for SVLDR Scheme 2019 and SVLDRS Form-4 has been issued to them, in that circumstances, no penalty can be imposed against the appellant as the matter against the appellant are also closed. 8. Further, we find that in this case, it is second round of litigation and early round of litigation, this Tribunal has passed the following order:- "8. From the arguments advanced by both the sides, the allegation of the Revenue is that as M/s. JV has not received Nickels and same is not an input for M/s JV to manufacture their final products i.e. copper ingots, therefore, M/s. JV is not entitled to take cenvat credit on Nickel as the same has been diverted by the suppliers and only invoices were issued. It is also the case of the Revenue as M/s J. V has not manufactured copper nickel alloy ingots, therefore, M/s. JSL is not entitled to take cenvat credit on the invoices issued fim Copper Nickle Alloy Ingots. From the various arguments advanced before us, the following questions arose in our mind : (2) Whe....
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....-examination of the persons, whose statements have been relied upon by the adjudicating authority in adjudication and thereafter, to adjudicate the matter of M/s. JSL. and others, which is having consequences of decisions in the case of M/s JV. We wish to mention here that both the show cause notices in question are required to be adjudicated by a common adjudicating authority for proper adjudication of the matter. Therefore, by setting aside the impugned orders, we remand back the matters to the adjudicating authority for de novo adjudication as directed hereinabove. With these observations, the appeals are disposed of." 9. In remand proceedings, the adjudicating authority proceeded with the case and finally agreed that the Appellant No. 1 has received Copper Ingots, but, in the invoices, it is mentioned that Nickel Alloy, copper ingots. The factum of receipt of goods by the Appellant No. 1 has not been disputed by the adjudicating authority. In that circumstances, it is to be seen that whether cenvat credit can be denied to the appellant or not ? 10. The said issue has been examined by this Tribunal in the appellant's own case vide Final Order No. 61960-61964/2018 dated 26.....
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....ds including the gate register, issued for manufacturer of further goods in the factory. Likewise, the appellant No. 2 on receipt of the show cause notice filed detailed reply vide their letter dt. 03.04.2012 in which they gave complete details about the goods, the mode of transport and also submitted the copies of relevant documents such as consignment notes issued by the transporter, sales tax / vat returns, assessment order from the sales tax department, copies of declaration inform-H and the statements of bank accounts to substantiate their claim that they have received the goods from appellant No. 2. All these were verifiable facts. The department has not conducted any Investigation whatsoever on the factual statements made by the appellant No. they have not been commented upon in the Order-in-Original neither there is any rebuttal. Therefore, the existences of these documents and the transaction conducted under them have to be accepted. Thus, it cannot be said that the appellant No. 1 did not received any goods from appellant No. 2. Further, the show cause notice has alleged fraud and invoked extended period for demand. In the entire proceedings no evidence whatsoever has bee....
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....l and he cannot be expected to verify the records of the supplier's broker to check whether infact the supplier has paid duty on the goods supplied by him or not. As such, he has relied upon the Board's Circular being Circular No. 776/82/03-CX., dated 15-12-2003 laying down that as long as bona fide nature of the consignee transaction is not doubted, credit should not be denied. He has also relied upon various decision of the Tribunal to hold that the recipient of the inputs, where all the legal formalities stand complied with, would be entitled to Cenvat credit of duty. 7. I find Revenue is not disputing the fact that M/s. M.K. Steels raised dealers invoice, giving all the particulars required to be given under law in the invoice supplied to the respondents. It is also not being disputed that the respondent received inputs and entered the same in their records. The said inputs were further used by them in the manufacture of their final product, which were cleared by them on payment of duty. It is also a part of the record that the goods travelled from the dealer premises to the respondents premises under the cover of form 31 of UP Trade Tax department. This fact i....
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....the receipt of the goods. In such a situation, it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee, in the present case, was found to have duly acted with all reasonable diligence in its dealings with the first stage dealer. The view which the Tribunal has taken is consistent with the judgment of the Jharkhand High Court in Commissioner of C. Ex., East Singhbhum v. Tata Motors Ltd. 2013 (294) ELT 394 (Jhar.), where it was held as follows:- ... Once a buyer of inputs receives invoices of excisable items, unless factually it is established to the contrary, it will be presumed that when payments have been made in respect of those inputs on the basis of invoices, the buyer is entitled to assume that the excise duty has been/will be paid by the supplier on the excisable inputs. The buyer will be therefore entitled to claim Modvat credit on the said assumption. It would be most unreasonable and unrealistic to expect the buyer of such inputs to go and verify the accounts of the supplier or to find out from the department of Central Excise whether actually duty has been paid on the inputs by the suppl....
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....ove stated case that it would be impracticable to require the assessee to go behind the records maintained by the first stage dealer. In the present case, the assessee is found to have duly acted with all reasonable diligence in its dealings with the first stage dealer. In view of the above, I find that the ruling of Hon'ble High Court of Allahabad in the case of Juhi Alloys Limited (supra) is squarely applicable to the present case." 12. Further, in terms of Rule 3 of CCR, 2004, the manufacturer is entitled to take cenvat credit on inputs which have been received in their factory. Admittedly, in the case, it is the finding of the adjudicating authority that the appellant has received coppor ingots in their factory. Although, the description in the invoices is not as per the observation made by the adjudicating authority, the same cannot be fetal to deny cenvat credit to the appellants as held by the Hon'ble Allahabad High Court in the case of Juhi Alloy (supra) wherein the Hon'ble High Court observed as under:- "7. In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps....