TaxTMI 
TaxTMI 
2025 (6) TMI 1165
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....ssembly" which is claimed to be one of the components for M/s.Godrej Consumer Products Limited, Puducherry, used in the manufacture of Mosquito Repellent Device. The said assembly was supplied entirely by M/s.Godrej Consumer Products, Puducherry for use in the manufacture of mosquito device by the Appellant. It appears that there was a search in the premises of the Appellant-firm on 08.12.2014 by the investigating team of the Central Excise Department, during the course of which statements of several employees were recorded. Allegations/sum and substance of the charges levelled against the appellants in the SCN as we could notice from paragraph 18 of the SCN are the demand with applicable interest of the equal credit allegedly wrongly availed on invoices, penalty on the firm, its Managing Partner and other Partner, which are the consequences of the duty demand. 3. From the documents placed on record, we find that during the course of search claimed to be from 11 AM to 06.00 PM/18.00 hours on the said date, statements of S.Bhuvana-Accounts Assistant, M.Kavitha-Production Supervisor, S.Sudha-Stores Assistant, Pankaj Ohja-Manager Admin. R.Prakash-Production in-Charge and Prasanna Bhu....
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....and opposed to principles of natural justice and therefore, the same deserves to be set aside. (2) In the Mahazar dated 08.12.2014, there is a mention about the presence of raw materials like copper wires, PVC wires in different colours & quantity and various other items which are required to make 2 pin wire assembly; the presence of huge quantities of raw materials, consumables, finished goods, semi-finished goods & machineries which, however, do not find a place in the impugned order. (3) Appellant actually manufactured and supplied wire insulated assembly to Godrej; there was no seizure either in the transit or at the alleged destinations of diversion of the eligible inputs allegedly diverted. (4) The retail invoices/cash memo bill of M/s.Jain Trading for 2013, 2014 and a few Excise invoices of Welcord-Jaipur, receipt notebooks, raw materials statement dated 23.07.2014, etc. did not add up to meet the volume of the entire clearances of finished goods of the Appellant-Firm in 2013 and 2014, which is not even claimed in the SCN. Hence, department did not correlate the volume of finished products cleared with the required raw-materials as per bill of materials. (5) If the D....
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....y, the ld. Asst. Commissioner Sri M. Selvakumar has countered the allegations of (i) OIO travelling beyond SCN, (ii) functional nature of on-going factory and disputed by the Revenue, (iii) impossibility of stock-taking from 11.00 AM to 6 PM; and (iv) Impugned order ignoring vital facts and materials found which were recorded in the Mahazar. He would further contend that in the first place there was no physical receipt of alleged inputs against which CENVAT credit was availed, since the Appellant-firm had no manufacturing facility for using the alleged inputs, it only procured finished goods under fictitious invoices which were sold their customers. With reference to the contents of SCN specifically para 3.3 he would urge that the appellant was only engaged in the manufacture and sale of (1) 5MM Terminal Set consisting of 5MM 'I' Braided, 5MM 'I' Silicon and 5MM 'U' Braided, (2) 8MM Terminal set consisting of 8MM 'U' Braided and 8MM "I' silicon and (3) Neon Assembly. Hence, it is not the case of the Revenue that the appellant did not manufacture anything but that the appellant had taken credit on inputs which were not received in the factory and which cannot be used in the machiner....
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....Bang.) (vi) CCE Madurai Vs N. Manikandan 2009 (246) ELT 349 (Tri.-Chennai) (vii) CCE Vs Arsh Casting Pvt. Ltd. 2010 (252) ELT 191 (H.P) 11. He would sum up his arguments by stating that the stocktaking was absolutely incorrect, statements recorded on the date of search are not reliable as the Revenue has not considered their retracted statements made on 10.12.2014, inputs on which credits was availed are actually on the basis of valid CENVAT documents capable of being used in the manufacture of their final products. He would rely on the following judgements in support : (i) Resham Petrotech Ltd. and Ors. Vs. CCE & ST - 2019 (8) TMI 757-CESTAT Ahemedabad (ii) Gujarat Victory Forgings Pvt. Ltd. Vs CCE&ST - 2019 (7) TMI 5 CESTAT Ahmedabad (iii) India Extrusion Vs CCE 2019 (3) TMI 853 -CESTAT HYDERABAD 12. After hearing the counter arguments, we find that the issue lies on a very narrow compass: the allegation of the Revenue is that Appellant No.1 did not have required manufacturing facility to manufacture the goods on which CENVAT credit was claimed. The appellant is correct in its claim that the Revenue having not totally denied existence of manufacturing plant/facilities....
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....was very much happening-though not on the date of inspection-it was shown by Welcord apparently through a DVD submitted through letter dated 09.01.2015 but the same do not find any place in the OIO. It is also claimed that the Central Excise offices were from time to time visiting Welcord's factory premises and carrying out the checks / audit of accounts which fact is never denied. 17. On overall analysis, we find that the mahazar was drawn on 08.12.2014 and the witnesses have voluntarily travelled from Madipakkam and Padi, Chennai all the way to Mettupalayam, Pondicherry only to participate and witness the mahazar proceedings. Annexure (A) is the inventory of physical stock of finished/semi-finished goods / raw materials, consumables and machinery at the premises of the Appellant-firm. The condition of the above machinery as to whether they were in working condition or not is not clearly forthcoming as, apparently, none of the team members or even any of the witnesses is an expert to certify to that effect. The reference as "Unused/Dilapidated" does not lead us anywhere and hence, the investigation, according to us, is only a half-hearted attempt by the D.R.I. Hence, we are of th....