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2023 (10) TMI 1158 - CESTAT KOLKATAReversal of CENVAT Credit - fake invoices - vendor not having proper infrastructure for manufacturing and generating such scrap at his end - activity of cutting and generating scrap, amounts to manufacture or not - denial of cross-examination - violation of principles of natural justice - HELD THAT:- When a proper invoice has been made by vendor, which clearly shows the payment of Excise duty and the vendor has filed their Returns, the eligibility of cenvat credit cannot be questioned at the end of the appellant who is the receiver of goods. Further, it is also observed from the Orders passed by the lower authorities that they have not denied the cenvat credit on this ground. Paper transaction - non-receipt of scrap - HELD THAT:- In spite of seeking a copy of these statements and seeking cross examination of these persons, the same was not granted by the authorities. When the statement itself is not issued to the appellant, it is not clear as to whether the same were supporting the Department’s case or not - merely by the observations of the adjudicating authority cannot be relied upon that the statements are in favour of the Department. It is a gross error on the part of the Adjudicating authority that when the appellant sought to cross examine of the said 8 persons, the same was not granted - It has been held in catena of decisions that the persons recording the statement under Section 14 of Central Excise Act, 1944 have to reiterate the same before the adjudicating authority and then only it should be admitted as an evidence. After this, an opportunity should be given to the noticee to cross-examine them. In this case, in spite of the appellant seeking cross examination of these persons, the adjudicating authority has failed to give them this opportunity. Non-issue of recorded statement of 8 transporters and 2 other officials, denial of cross-examination of these persons and nonproviding of the statements/letters from RTO about the vehicles, are grave errors committed in the investigation process which have proved to be fatal to the Department’s stand. The entire proceedings have been initiated based on presumption and assumption without any concrete evidence brought in by the Department against the appellant. After going through in details of payments made both to the vendor and to the transporter for the freight charges, which are already admitted in the show-cause notice itself, the Department has not made out any case against the appellant. Appeal allowed.
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