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2022 (3) TMI 937 - AT - Central ExciseCENVAT Credit - duty paying invoices - wrongful availment of CENVAT credit on the strength of invoices issued by M/s. Jain Ispat without actually receiving the inputs of these invoices in their factory - HELD THAT:- There is no denial to the fact by the appellants that M/s. ASL has not challenged the impugned order vide which the entire demand against them to the tune of ₹ 69,13,299/- and ₹ 76,20,922/- along with the proportionate interest and penalty to the equal amount has been confirmed. Statement of Director of M/s. ASL, Shri Vikram Agnihotri is very much on record where he has admitted that on some occasions they were purchasing the iron and steel scrap from the market. Both the appellants have been admitted to be their raw material suppliers. When it came to proving the purchase of raw material respect of imports from the present appellants. Shri Vikram Agnihotri had not deposed as to who arranged the transport and who paid the freight while receiving raw material from the present appellants. There is no denial that M/s. Jain Ispat has been the dealer of scrap of M/s. ASL. Their premises also were got searched. The appellants defence against M/s. Jain Ispat has been discussed by the Adjudicating Authority in para 16 of order under challenge whereof it has been appreciated that the lorry receipts recovered from M/s. Jai Ispat premises were fabricated as the name of transport company and the telephone numbers mentioned in those lorry receipts were found bogus. Based upon the said evidence only the adjudicating authority had held that objective of the invoices issued by M/s. Jain Ispat and the said false lorry receipts were intended to assist M/s. ASL to avail the CENVAT credit on the goods fraudulently. Coming to the evidence against M/s. K G Ispat Ltd., admittedly no search was conducted in the premises of M/s. K G Ispat. Though the documents recovered from M/s. ASL are showing receipt of inputs under the invoices issued by M/s. K G Ispat during the period 2.5.2008 to 31.08.2008 but the documents recovered from M/s. ASL could not be corroborated from any of the documents from M/s. K G Ispat as no recovery from their premises was made by the department - No doubt the Director of M/s. ASL while deposing involvement of M/s. Jain Ispat has simultaneously named M/s. K G Ispat as well, but the only factum as far as M/s. K G Ispat is concerned is that there is nothing more than the third party evidence against M/s. K G Ispat. Penalty upon M/s. K G Ispat - HELD THAT:- The director of M/s. K G Ispat Shri Raj Kumar Gupta in his statement dated 28.5.2009 deposed that MS ingots(HC) cannot be used for rolling purpose. M/s. K G Ispat was admittedly the supplier of MS ingos (HC). No chemical report has been produced by the department to falsify the statement of Shri Raj Kumar Gupta. The statement of Shri Amit Shukla, Manager (Finance) of M/s. Raj Ratan Castings (P) Ltd. who was supplying the MS Ingots (HC) to M/s. K G Ispat also cannot be relied upon in absence of chemical analysis report or any other technical verification. Mere 3rd party evidence cannot be relied upon to fasten the penalty. Penalty upon M/s. K G Ispat is held to have wrongly been imposed. The penalty imposed on M/s. Jain Ispat has been upheld while the penalty of ₹ 10 lakh imposed on M/s. K G Ispat is hereby set aside - appeal allowed in part.
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