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2016 (2) TMI 534 - AT - Central ExciseCenvat Credit - clandestine clearance of Inputs - It has been alleged in the show cause notice that the imported inputs so diverted to local markets appears to have been sold in cash to the persons, who did not need Central Excise invoices and no record has been kept by the assessee regarding such transactions. The buyers of such unaccounted raw materials appear to have used it for unaccounted production and clearance of articles of non-ferrous metal. And the input shown have been receipt in the factory at Silvasa by the assessee appears to have been substituted by bazaar (local) non-duty paid scraps. Held that:- the non-receipt of inputs and non-use of the same in final product are based upon the statements and the records of transporter. But, the assessee during investigation categorically stated that they paid charges to the transporter, inputs were used in the manufacture of final product, duly recorded in their statutory records. The investigating officers had not verified the records of the assessee and merely proceeded on the basis of statement of third party. The inference of non-receipt of inputs and denial of Cenvat Credit on the basis of the statements of third party, who had failed to disclose the details of supply of inputs in mid-way, cannot lead any conclusion, the assessee in their statements stated the receipt of the inputs and used in the manufacture of final product and duly recorded in the statutory records, which cannot be discarded by mere assumption and presumption. Search was conducted at the premises of appellants, but, not a single evidence was found of purchase of bazaar scrap by the appellant as alleged in the show cause notice. - the said allegation is totally on the basis of assumption and presumption. - Demand set aside - Decided in favor of assessee.
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