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2019 (8) TMI 757 - AT - Central ExciseClandestine removal - diversion of raw material - shortage of 8250 kg of polyethylene granules - period of August’02 to March’03 and January’04 to Oct’04 - denial of cross-examination - principles of natural justice - reversal of CENVAT Credit - HELD THAT:- The diversion of the raw material is based upon the statement of the transporter and the private records seized from the factory and office premises of the Appellant. The papers written by Shri Rohit Kumar Asopa kept in seized records A/29 is alleged to be containing details of payment of transportation charges to the transporter, M/s Bombay Golden (India) and receipt of cash by the appellant from the said transporter. The said papers were found to be written by Shri Rohit Kumar Asopa and as per his statement, it was written on the instruction of the director, Shri Pradeep Lohia. Reliance has also been placed upon the statement of partner of M/s Bombay Golden (India) wherein he stated that the bills were issued for the freight charges from GAIL, Pata to Silvassa and the entire amount was paid in cheque and in case of diversion of goods in Delhi, the cash on account of excess freight was returned back to the Appellant. Though the allegation is of diversion of granules, but no investigation has been made from the transporter, truck driver as to where the said goods were diverted. Even Shri Asopa who had written/ maintained the records on the basis of which the allegation of non receipt/ diversion of granules was made was not questioned about the recipient of such goods. Further it is nowhere appearing in the show cause notice as to how the consideration of such alleged diverted goods were received - The statement of Shri Asopa stands retracted by him during his cross examination and hence cannot be relied upon. Moreover the records maintained by him are in isolation and hence not reliable. The show cause notice and the impugned order has held that since the route passing through Pithol check post is the shortest route, hence the vehicles not passing through the said route cannot be said to have transported goods to Appellant’s factory. Only on the basis of such assumption, it cannot be concluded that since the vehicles did not pass through said check post and hence did not reach Appellant Unit. No statements of even a single driver has been recorded - there is no substance in the contention of the show cause notice that if the goods has not been transported through shortest route, the receipt of goods by the Appellant cannot be said to have taken place. The Tribunal had directed to re-examine the statement which was not done by the adjudicating authority. The statement of Shri Rohit Kumar Asopa stands retracted by him and the director of the appellant, Shri Pradeep Lohia, has refused diversion of goods, as alleged in the show cause notice. Moreover, in absence of any investigation to identify the buyer of the diverted material and receipt of consideration by the appellant company, we are of the view that merely on the basis of transporter’s statements or the private records, it cannot be concluded that the appellant, M/s Resham Petrochem has diverted the goods. Thus the demand does not sustain - In case of demand of ₹ 78,495/- we find that except arriving at shortage no evidence of removal of goods has been relied upon. The statement of Gopalji Karn, Manager and Authorised Signatory stating removal of goods is not supported by any evidence. No buyer of such goods has been shown or its transportation evidence is on record. Also no consideration has been shown to have been received on account of such alleged removal. In such case we do not find any reason to make demand from M/s Resham. The department could not establish the non receipt of inputs beyond doubt to uphold the impugned order - Appeal allowed - decided in favor of appellant.
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