TaxTMI 
TaxTMI 
2025 (11) TMI 432
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....uct of the party, under rule 14 of the CENVAT Credit Rules r/w Section 11 A(1) of the Central Excise Act, 1944and the Central Excise Duty amounting to Rs.45,00,000/-, which has already been deposited by the party vide six Chalaan is also ordered for appropriation against this demand. 2. I also confirm Interest at appropriate rate as recovered from them against aforesaid demand under Section 11AA, of the Central Excise Act, 1944. 3. I also impose Penalty of Rs. 99,81,644/-(Rs. Ninety Nine lakhs Eighty One thousand Six hundred & Forty Four only) upon them under Section 11AC of the Central Excise Act, 1944. Provided further that where service tax and interest payable thereon is paid within thirty days of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (ii) of section 78, the penalty payable shall be twenty-five per cent (25%) of such service tax. Provided also that the benefit of reduced penalty under the second proviso shall be available only if the amount of such reduced penalty is also paid within such period. 4. I also impose personal penalty amounting to Rs. 25,00,000/- (Twenty five lacs) on upo....
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....entral Excise Duty of Rs. 99,81,644/- (Rs. Ninety Nine lakhs Eighty One thousand Six hundred & Forty Four only) inclusive of Cess, which was not available with the party and was utilized against clearances of finished goods, thereby making clearances of final goods as cleared without payment of duty, should not be demanded and recovered under Section 11AA, of the Central Excise Act, 1944. (iii) Penalty should not be imposed upon them under Section 11AC of the Central Excise Act, 1944, ibid for contravention of the provisions of the said Central Excise Rules in the manner mentioned in this Show Cause Notice with the intent to evade payment of Central Excise Duty. 2.6 The Show Cause Notice was adjudicated as per Order-In-Original referred in Para 1.2. 2.7 Aggrieved Respondent filed appeal before the learned Commissioner (Appeals). Two more Appeals were filed by the co-noticees in the show cause notice. All the three appeals have been decided by the impugned order referred in Para 1 above. 2.8 Aggrieved by the order of the Commissioner (Appeals) Revenue has filed the present appeal stating as following:- ⮚ The facts of the case amplitude that the Depa....
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....ri. - Del.)] o Krishan [(2013 (288) E.L.T. 366 (Del.)] o Rotumal Bherumal [2000(126) E.L.T. 199 (Mad.)] o Telestar Travels Pvt. Ltd. [2013 (289) E.L.T. 3 (S.C.)] o Manidhari Stainless Wire Pvt. Ltd. [2018 (360) E.L.T. 255 (A.P.)] o Kin-Ship Services [2020 (32) G.S.T.L. 45 (Kar.)] o Divine Impex [2019 (369) E.L.T. 858 (Tri. - Mumbai)] o Laxmi Colour Lab [2014 (36) STR 636 (Trib-Mumbai) o Prathyusha Associates Shipping P. Limited [2014 (36) STR 1145 (Trib-Bang)] o Alaska Tyres (P) Ltd. [2002 (145) ELT 329] o Steel Industries [2005(188)ELT33 (CESTAT)] ⮚ The charge of suppression with intent to evade payment of duty isclearly established and extended period for making demand was invokable. Impugned order holding to contrary is bad in law. 3.1 We have heard Mrs. Chitra Srivastava, Authorized Representative for the Revenue who reiterates the submissions made in the appeal. None was present on behalf of the Respondent. 4.1 We have considered the impugned order along-with the submissions made in the appeal and during the course of arguments. 4.2 The impugned order records find....
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....evidence to the contrary I find the contention of the appellant regarding receipt and further use of the impugned goods for the manufacture of dutiable goods tenable. The Hon'ble CESTAT, Bangalore in case of Mis G. S. Alloy Casting Limited Versus Commissioner of C. Ex., Guntur [2016 (331) ELT 310 (Tribunal- Bangalore)], covering the issue, has inter-alia observed that: - "Demand of Cenvat alleged to be availed on the basis of fake invoices without actually receiving the raw materials in question - Evidence collected by Revenue is only in the shape of statements of third party - Uncorroborated statements of third party cannot be adopted as an evidence, without corroboration from an independent source though such statement can be of some value but cannot be solely relied upon for the purpose of holding against the assessee investigation from the transporters even though their names were available in the respective invoices - Revenue is silent on the issue that if the appellants has not received the materials in question, how have they manufactured the corresponding final product it is not only impractical but impossible to manufacture the final product without raw materi....
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....abad)), has inter-alia also expressed similar views by holding that "In absence of corroborative evidences and cross-examination of concerned persons, their statements not reliable - No mala fide intention in taking credit-Credit allowed, 2004" In view of the above, it was not proper on part of the adjudicating authority to place reliance on the statements, without providing the opportunity of cross examination as requested by the appellant. Under the circumstances the statements relied upon had no evidentiary value for the confirmation of the dern-and. The demands confirmed by placing reliance on the statements of the witnesses without allowing their cross examination was legally not sustainable. 7.2 I further find that it was alleged in SCN that a transaction of Rs.43,50,000/- was recorded on Page No. 3 of the Document No. 54 (resumed from the appellant) and appellant trader had appended his signature on the said document and in respect of the same he had stated that out of the goods purchased from the appellant he sold some goods to M/s Mittal Iron & Steel, who made payments directly to appellant director. In this context the appellant had contended that the en....
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.... support the contention of the appellant that he had taken cenvat credit only on the receipt of the impugned inputs as the same were not only duly accounted for and were shown to have been used in the manufacture of the finished goods but there was also no allegation of shortage of the alleged inputs in the factory premises of the appellant. Under the circumstances the allegation of suppression of facts was not sustainable as the goods were duly accounted for. There was nothing to draw the inference of intent to evade. Under the circumstances, the extended period was not available for raising the demand. As the cenvat credit was taken in the year 2012-13 to 2014-15, for which the SCN was issued only on 27.12.2017, the entire demand was also time barred. Besides, as discussed above the demand was not sustainable on the merits as well. 7.4 As the demand itself is not sustainable, the penalties imposed on the appellants are also not sustainable. Besides, I also find that the provisions of Rule 26 of the CER were not attracted in case of appellant trader as there was nothing on record to show that he was aware about the fact that the appellant was claiming alleged irregular cr....
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....ection 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 15. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. 16. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a Gazetted Central Excise officer....
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....ll.), which, too, unequivocally expound the law thus : "If the Revenue choose (sic chose?) not to examine any witnesses in adjudication, their statements cannot be considered as evidence." 21. That adjudicating authorities are bound by the general principles of evidence, stands affirmed in the judgment of the Supreme Court in C.C. v. Bussa Overseas Properties Ltd., 2007 (216) E.L.T. 659 (S.C.), which upheld the decision of the Tribunal in Bussa Overseas Properties Ltd. v. C.C., 2001 (137) E.L.T. 637 (T)." 4.5 Hon'ble Bombay High Court in case of Prakash Raghunath Autade [2022 (380) E.L.T. 264 (Bom.)] while agreeing with the view of Punjab and Haryana High Court observed as follows: 10. We share the views expressed by the Allahabad High Court and the High Court of Punjab and Haryana. 11. Section 9D of the Act, which is the sheet anchor the petitioner's claim, reads as follows : "9D. Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any Central Excise Officer of a gazette rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose ....
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....d October, 2020 has clearly denied and disputed the allegations levelled against him. The only question is at what stage would he be entitled to cross-examine the witnesses. As has been held in G-Tech Industries (supra) as well as in Parmarth Iron Pvt. Ltd. (supra), it is only after the statements of witnesses are recorded by the relevant authority in course of adjudication of proceedings and such evidence is regarded as relevant that the noticee has the right to claim that he be extended the opportunity to cross-examine such witnesses so as to extend to him fair, reasonable and adequate opportunity of defence." 4.6 Hon'ble Calcutta High Court in case of AJAY SARAOGI [2023 (386) E.L.T. 333 (Cal.)] observed as follows: 55. At both the stages, the appellant had prayed for cross-examination of Mr. Nirmal Kumar Karmakar. The adjudicating authority had rejected such prayer on the ground that, the documents seized from the appellant had corroborated the statements made by Mr. Nirmal Kumar Karmakar. The appellate authority had rejected the prayer for cross-examination by placing reliance on Surjeet Singh Chhabra (supra) and alluding to the fact that although Mr. Nirmal Kumar K....
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....e not introduced documents seized from Mr. Nirmal Kumar Karmakar and statement made by Mr. Nirmal Kumar Karmakar in the adjudication proceedings. Independent of such documents seized from and the statements of Mr. Nirmal Kumar Karmakar the Enforcement Directorate had to prove the charges as against the appellant, on a preponderance of probability if not beyond reasonable doubt, given the quasi criminal nature of the proceedings. Having introduced the statement of Mr. Nirmal Kumar Karmakar and documents seized from him in evidence in the adjudication proceedings, it was incumbent upon the Enforcement Directorate to allow cross-examination of Mr. Nirmal Kumar Karmakar. Not having done so, the proceedings both at the order-in-original stage as also in the appellate stage have been vitiated by the breach of principles of natural justice. 59. It has been contended that, the appellant in FEA 2 of 2009 has not established any prejudice by the denial of the right of cross-examination. Right of cross-examination has been recognized by judicial pronouncements noted above in proceedings under the FERA which results in an adjudication imposing consequences. In FEA 2 of 2009 the appell....
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....o not hold anything contrary to this decision. These statements are definitely admissible piece of evidence and need to be corroborated in the adjudication proceedings by other tangible evidences. By cross examination the witness the noticee seeks to dis-credit the statement made by witness and if he makes the request for cross examination same should be allowed or disallowed by recording suitable reasons. The request made cannot be ignored. Impugned order specifically has concluded that order in original fails to extent of recording the reason for not permitting the cross examination, while has relied upon these statements against the noticee. In case these statements could not have been relied there is no other evidence elsewhere to establish that the Respondent had not received these goods in his factory premises and have taken fraudulent credit. 4.8 Further, we observed that the Respondent was undertaking manufacturing activities and also clearing the same on payment of duty. If these inputs were not been received by the Respondent then how they were manufacturing and clearing the goods. No investigation has been made in this regard neither non receipt was established any sh....
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....2 as no cogent evidence has been produced by the appellant for non-movement of the goods along with invoices, the benefit of doubt goes in favour of the appellants. Consequently, we hold that no penalty is imposable on the appellants. 4.9 In case of Victora Tools Engineers (P) Ltd. [2015 (329) E.L.T. 864 (Tri. - Del.)] following was observed 5. I find that the Revenue-Respondent had relied upon certain statements recorded from outside parties to substantiate the allegation that the goods have not been received in the factory of the appellant. In this context, statements recorded from Shri Rupesh Bansal, Proprietor of M/s. Bhagwati Trading Co. are relevant for settlement of the present dispute. In the statement dated 7-11-2005, the question asked by the Central Excise Department was to the effect that "who are the main customers, to whom you had passed on the Modvat credit." To the said query, the answer of Mr. Bansal was "they passed on Modvat benefit to various customers and M/s. United Chain Industries and M/s. Iron Works (Jorian) Pvt. Ltd., Jamuna Nagar are the main customers". Further, in the statement recorded on 16-3-2006, pursuant to the query of the Department a....