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2022 (2) TMI 1167 - AT - Central ExciseClandestine Removal - availment of irregular CENVAT Credit - duty paying documents - allegation is that the credit availed fraudulently on the strength of Cenvatable invoices against which no goods i.e. Copper ingots were received by them physically in their factory premises - existence of manufacturing activity or not - sufficient evidences present or not - sufficient investigation done by the Department or not - demand based on third party evidences - HELD THAT:- Apparently and admittedly, there is no evidence on record as against the present appellant other than the statement of Shri Rajesh Chouhan, the authorised signatory of the appellant. Irrespective Shri Yogesh Singh, Director of M/s. Sypher Impex Alloys Pvt. Ltd. had repeatedly admitted for having no trading activity in his factory at Bhiwadi since 2013. But there is no evidence procured by the Department about any arrangements by M/s. Sypher Impex Alloys Pvt. Ltd. with the present appellant. Though the appellants have been receiving material through M/s. Amtek India Ltd. which in turn was receiving from Swastik the said Swastik was having invoices of M/s. Sypher Impex Alloys Pvt. Ltd. but this trail is highly insufficient to hold precisely the invoices in the hands of the appellants are such, against which no goods were sent. To substantiate his case the appellants have placed on record voluminous documents including the purchase orders, invoices, gate registers, GRRs and ledger account. Perusal thereof shows the clear connectivity in these documents reflecting that the appellants were purchasing the copper raw material for their final product against the duly issued invoices by the supplier. These invoices were precisely mentioning the details of the vehicles through which the goods were to be transported from the suppliers for being received by the appellant. Apparently and admittedly there is no investigation from the driver or owner of the said vehicles. The said lacunae creates a major bubble of doubt, the benefit of which is to be extended in favour of the appellants. The law i.e. as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence, is well established - Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated various aspects - thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. Hence the reliance of Commissioner (Appeals) merely on oral testimony is held not relevant and unjustified specially when there is no apparent admission as is alleged. Otherwise also the statements recorded are nothing more than third party evidence - Law is clearly settled that third party evidence cannot be held as the basis for proof of guilt of some other person. Admittedly no search was conducted in the appellants premises. No record was recovered from the appellants custody, nor any material was seized . The findings against the appellants are accordingly held to be nothing but outcome of assumptions based upon the Panchnama drawn in the factory premises of M/s. Sypher Impex Alloys Pvt. Ltd. Thus, it is held that the documents as that of invoices, gate registers, raw material registers, GRs and ledger account as have been relied upon by the appellants, since the stage of filing of reply to the show cause notice. The goods mentioned in the invoices were duly been received by the appellants. The invoices were Cenvatable invoices. Accordingly, the credit thereupon is therefore held to have been rightly availed. The order under challenge is therefore, set aside - Appeal allowed - decided in favor of appellant.
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