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2016 (3) TMI 665 - CESTAT NEW DELHIRecovery of Cenvat credit - whether the dealers supplied goods to various persons who did not need Cenvatable invoices and supplied only Cenvatable invoices to M/s KE-I & II without supplying any goods? - Held that:- It is a fact that M/s KE-I & KE-II never admitted that they only received invoices without the goods. Not only that, they produced proper records maintained in this regard which showed receipt of the raw material for which payments were duly made and also produced transport documents. It is not in doubt that as statements of the transporters and others were relied upon against M/s KE-I & M/s KE-II, not permitting their cross-examination did cause prejudice to them. In such a situation, such statements of third parties/co-accused whose statements were used to the prejudice of M/s KE-I & M/s KE-II have to be ignored for the purpose of deciding the mater with regard to M/s KE-I & M/s KE-II because their cross examination was not permitted. If the said statements are ignored there remains hardly any evidence against M/s KE-I & II for sustaining the allegation against them. It has also been held by several judgements that 3rd party evidence cannot be made the sole basis of sustaining the demand. When the allegations against M/s KE-I & M/s KE-II are not found sustainable, the question of penalty even on co-noticees would not arise. - Decided in favour of assessee
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