Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 10 - CESTAT NEW DELHIRecovery of CENVAT Credit alongwith interest and penalty - availing credit without actually supplying the goods - proper procedure under Section 9D of CEA followed or not while recording statements of various persons - HELD THAT:- Evidently, the statements will be relevant under certain circumstances and these are given in clauses (a) and (b) of sub-section (1). There is no assertion by either side that the circumstances indicated in (a) existed in the case. It leaves us with (b) which requires the court or the adjudicating authority to first examine the person who made the statement and form an opinion that having regard to the circumstances of the case, the statement should be admitted in evidence - all the statements are not relevant to the proceedings. It has been held in a catena of judgments including M/S JINDAL DRUGS PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND ANOTHER [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] that section 9D is a mandatory provision and if the procedure prescribed therein is not followed, statements cannot be used as evidence in the proceedings under Central Excise Act. Therefore, the 35 statements relied upon in the SCN are not relevant and hence also not admissible. Once the registration is issued by the department, the buyer of goods can procure goods from such a registered trader and take credit on the strength of such invoices. The case of the Revenue is that the traders and the manufacturers never existed but they issued Cenvatable invoices only on paper and had not supplied duty paid scrap at all and they could have supplied bazar scrap (post consumer scrap) against such invoices - As per the SCN, the manufacturers and traders did not exist and for that reason Cenvat credit taken by the assessee needed to be reversed but the manufacturers and traders also existed at the addresses indicated therein and they were asked as to why penalties should not be imposed on them - according to the impugned order, while these entities did not exist at all and for that reason, Cenvat credit is inadmissible on the basis of the second stage dealer’s invoices issued on the basis of the invoices issued by these manufacturers and first stage dealers on the one hand, they did exist and had been served the SCN and notices of personal hearing but such opportunities were not availed. The appellant, as the buyer, cannot be expected to investigate if the departmental officers had issued the registrations correctly or not and take business decisions accordingly. The appellant is also neither required nor is competent to launch an investigation to see if the registered dealer who was issuing to him an invoice had, in fact, maintained the records properly and that he had procured the goods from a first stage dealer who existed at his address and further that first stage dealer had, in fact, procured the goods from a manufacturer and that such manufacturer (who is registered with the department) existed, manufactured the goods, accounted for them properly and issued a correct CENVATABLE invoice to the first stage dealer. The reasonable precautions which the appellant or any other assessee is expected to take is placing orders on a registered manufacturer or dealer and receiving goods along with a Cenvatable invoice indicating all required details. The assessee is not required to launch an investigation. At any rate, as discussed above, Revenue itself was ambiguous about the existence of these units from the time they were registered until and including when the impugned order was issued - there are no grounds to deny Cenvat credit to the assessee. Consequently, the penalties imposed on Drolia and Choudhary also cannot be sustained. The impugned order is set aside - Appeal allowed.
|