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2022 (2) TMI 1169 - AT - Central ExciseRecovery of rebate claim - Inputs received in the factory or at the premises of job worker so as to claim rebate, or not - entire case was made out of on the basis of investigation done by DGCEI - reliability of the statements of witnesses - Penalty on Shri Deepak Agarwal, Director of Appellant’s company and Shri Sharad Gupta, agent - HELD THAT:- It is found from the finding of the Learned Commissioner that the duty paid inputs were in fact procured, transported and delivered to the appellant and sent to the job workers and manufactured goods were received back is established. Since the entire allegation in the Show cause notice, that the appellant has not received the input, does not survive after the above finding of the Learned Commissioner. On the basis of aforesaid order which attained finality as the revenue has not challenged the aforesaid finding, the learned Commissioner had no option except to discharge the show cause notice however, the learned commissioner proceeded to hold against the appellant on an entirely new ground which was not only not contained in the show cause notice but which in fact runs counter to the Show cause notice. The Commissioner came up with a new ground which is not there in the Show cause notice namely that para 4 of the rebate Notification 21/2004 permits sending the goods to job worker only for the limited purpose of tests, repairs, refining, reconditioning or manufacture of intermediates product and not for manufacturing of final product. He held that H.K Impex could not have sent the inputs to the job worker for the manufacture of Final product by the Job workers. The Commissioner has passed the present impugned order in original dated 30.09.2020 in which he has proceeded to hold the contrary and confirmed the Show cause notice by confirming the demand for rebate with interest and rejected the pending rebate claim. As per the above development, it is found that the main allegation which is the foundation of the case is that the appellant have not received the inputs and the same was not used in the export goods, therefore, the appellant is not entitled for rebate claim does not exist in terms of Commissioner’s earlier order dated 13.08.2018 read with Tribunal’s Miscellaneous order dated 06.08.2019. By this order settled that the appellant have received the inputs and used in the manufacture of export goods. On this undisputed conclusion the entire case of the department gets demolished. Scope of the remand order by this tribunal - HELD THAT:- Since after consideration of all the evidences and remand direction when the learned Commissioner in order in original dated 13.03.2018 read with Tribunal order dated 06.08.2019 concluded that the receipt of inputs by the appellant, use thereof at the job workers premises, manufacture of final product and export thereof. Since neither side challenged the finding of the commissioner’s order dated 13.03.2018 and this tribunal’s order dated 06.08.2019, the finding on the facts has discussed above attained finality. The appellant also raised the issue of jurisdiction of DGCEI whether they are empowered to issue the SCN or otherwise. Since we have decided the matter on merit we are not addressing the issue of jurisdiction. The allegation in the SCN is that the appellant have not received the inputs on which they have claimed the rebate. Prior to the commencement of investigation by DGCEI on 27.03.2006 in the normal course, the range officers visited the factory of the H.K Impex for verification of the extent of wastage in the Manufacturing process etc. in connection with the rebate claims. During such verification the officer took stock of the duty paid inputs, goods in process and finished goods for such verification. The officer has prepared their inspection report dated 10.03.2006 and 22.03.2006 - despite the fact of the inspection report on record no question was raised from the Superintendent and the Inspector who did the verification about the veracity of the inspection report. Therefore, the inspection report given by the officers which clearly established that the goods were received by the appellant cannot be brushed aside. In view of the settled position and the facts of the present case the witnesses whose statements were relied upon, since could not be produced for cross examination, their statements have no evidential value and in respect of the transporters whose statements were retracted during cross examination as they have stated that the goods have been received by the appellant and by the Job workers, the entire basis in the SCN which is the statements of the transporters gets demolished. It cannot be said that the appellant did not have sufficient machinery for manufacturing. It is also noticed that the DGCEI also obtained a Chartered Engineering Certificate regarding installed capacity of production of H K Impex at Umbergaon and their two job workers. However, no certificate of Chartered Engineering is produced to show that the machinery and power consumption were insufficient. As regard the allegation of lack of machinery and absence of manufacturing activity at job worker’s premises at Vasai, it was found totally incorrect and unsustainable for the reason that the appellant have given address of the job workers, the DGCEI chose to carry out verification only at one unit of job worker whereas, the second unit located adjacently of which intimation had been given, was not verified by DGCEI - department’s case is also on the allegation that the goods exported by H K Impex under claim for rebate were those purchased from Delhi suppliers through Shri Sharad Gupta. The report which was available in DGCEI file obtained under RTI by the appellant states that verification was done with Container Corporation of India Ltd. to ascertain whether the vehicle number under which export goods were received at Nhava Sheva port matched with the Vehicle Number in ARE-2/ Central Excise Invoices. The department’s case of non-receipt of inputs by the appellant and the job worker and non-manufacturing of export goods is baseless and without any tangible evidence. On the contrary, the appellant have established that the appellant have received the inputs in their factory and at job workers premises and the goods manufactured there from have been exported - it is concluded that the appellant M/s HK IMPEX have received the inputs, used in the manufacture of final product and such final product has been exported. Therefore, the appellant are entitled for the rebate as claimed by them. Penalty on Shri Deepak Agarwal, Director of Appellant’s company and Shri Sharad Gupta, agent - HELD THAT:- Since the penalty upon them imposed is consequential to allegation of wrong availment of rebate claim by M/s H.K Impex and such allegation does not survive . The personal penalties being consequential shall also not survive. Appeal allowed - decided in favor of appellant.
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