TMI Blog2013 (11) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has not reached appellant’s factory - No Nickel was found short at the time of Stock taking by the visiting officers of Central Excise and no quantity diverted - Nickel was seized anywhere in the proceedings, it cannot be appreciated that imported Nickel was diverted in and around Delhi - cenvat credit with respect to imported Nickel was correctly availed by the appellant as their duty paid character and use in the manufacture of end product has been established by the records maintained by the appellant along with their confirming statements that inputs have been used for the manufacture of the finished goods. Penalty u/s 11AC of the central excise act, 1944 - Penalty on Director and vice president under rule 26 of central excise rules, 2002 and rule 15 of cenvat credit rules 2004 – Held that:- As the credit with respect to Nickel has been held to be admissible, personal penalties imposed upon all the appellants under Rule 15 of the Cenvat Credit Rules, 2004 set-aside and corresponding equal penalty imposed under Section 11AC read with Rule 15 (2) of the Cenvat Credit Rules, 2004 also set aside - For clandestine removal of finished goods, personal penalties are required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of Panchnama and appellant paid Rs.12,43,861/- by cenvat account entry No. 1000 dated 09.7.2006. Further records were also drawn under Panchnama dated 08/09.07.2006 for investigation. 2.1 During the course of further investigation it was observed by the officers that appellant has availed cenvat credit of CVD amounting to Rs. 1,14,16,691/- and education cess of Rs. 2,04,598/- on imported Nickel Cathodes which were purchased by them on high sea sale basis and cleared through ICD, Tughlakabad without actual receipt of the material in their factory premises. It was alleged by Revenue that imported consignments of Nickel were originally destined for Nhava Sheva Port but were got transported by Shipping liners for clearance at ICD, Tughlakabad. The bills of shipping Liners were paid by M/s. Metal Linkers International Limited and M/s. Metal Traders (India) Private Limited in spite of the fact that goods were sold on high sea sale basis to the appellant. Investigations also revealed that containers were de-stuffed in same warehouse in Tughlakabad after Customs clearance. Investigations conducted at the CHA end revealed that imported goods were arranged to be sent to Local Godowns in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shree Rama Krishna Carrying Corpn. (Delhi) 15651/ 22.12.05 HR63/ A5656 5 502842/ 02.5.06 18,89,822/- Carrier Corporation of India 7102/ 05.5.06 HR38/ F0652 6 509803/ 31.5.06 8,87,935/- Suraj Transport Roadways P. Ltd 15086/ 07.6.06 HR69/ 5794 7 484579/ 03.2.06 10,94,360/- Fast Track Logistics 9467/ 07.2.06 HR38/ J0812 8 484580/ 03.2.06 11,12,321/- Fast Track Logistics 9465/ 07.2.06 HR38/ H3789 9 487242/ 17.2.06 12,16,735/- Fast Track Logistics 8664/ 21.2.06 HR38/ K4465 (iii) That during physical stock taking of appellants units no shortage of raw materials received was noticed. (iv) That as per certificate dated 27.8.2007 issued by Aviro Consultant, Ahmedabad, appellants have used 150.038 MT of Nickel during 2005-06 and 184.389MT during 2006-07, and adjudicating authority is wrong in his findings that Nickel is not required by the appellants. (v) Appellant made following subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no entry at the RTO check posts in respect of 14 trucks used for transporting inputs and the capital goods of the appellants from outside Gujarat State and there is no objection from the department about availing cenvat and that RTO reports are neither authentic nor reliable. That the transporters have deposed that goods were neither received in their transport company nor they have arranged for the transport of goods, however, it is evident from the seized documents that the transportation was undertaken by them. In respect of M/s. Suraj Transport Roadways, consignment note no. 15086 dated 07.6.2009, the documents seized from them show that the receipt of cheque and lorry challan no. 1894 shows transport of nickel to the appellants, apart from other consignments transported to others. Form No. 47A is issued by transport department in respect of truck no. HR69-5794 by paying Rs. 5,000/- to Transport Commissioner and deposit slip of cheque given by the appellants in Vijaya Bank for Rs. 8329/- and clearance of the cheque from Bank of Baroda. (f) That for B/E No. 484579, 484580 and 487242 where the transporter is M/s. Fast Track Logistics (cenvat credit of Rs. 34,23,416/-) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory:- (a) Commissioner vs. Dhanlaxmi Tubes Metal Industries -[2012 (282) ELT 206 (Guj.)] (b) Monarch Metals (P) Limited vs. CCE Ahmd. [2010 (261) ELT 508 (Tri. Ahmd.)] 3. Shri S.K. Mall learned A.R. appearing on behalf of the Revenue argued that main appellant in connivance with other appellants has not taken imported Nickel to their factory premises. He also emphasised that if the inputs were meant to be taken to appellant s factory then clearance should have been affected only at Nhava Sheva port and there was no need to bring the material to ICD, Tughlakabad. Imported Nickel was brought to ICD Delhi only for its diversion in and around Delhi. It was his argument that some of the transporters claimed to be used for transporting imported Nickel were found to be non existing. It was also argued that none of the check post stamps from Delhi to Appellant s factory are appearing on the transport documents. He highlighted the statement of Shri Mahavir Prasad Agarwal, proprietor of M/s. Mahavir Prasad Agarwal Co. given in Para 6.3.1 and 42.1 of the OIO dated 22.8.2012 that this unit has the facility, inter-alia, to cut Nickel for the customers situated in Anand Parbat Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant s factory. Certain enquiries were also undertaken from the Road Check Posts between Delhi and appellant s factory to suggest that inputs never reached appellants factory. The main appellant on the other hand has argued that local transporters at Delhi were only used to take the goods from ICD, Tughlakabad to a godown where the imported Nickel cathodes are segregated party wise and sent to their unit by a separate vehicle. Revenue has relied upon the statement of one Shri Mahavir Prasad Agarwal of M/s. Mahavir Prasad Agarwal Co., Anand Prabat, New Delhi, who is doing sheering and cutting of MS Sheets, SS Sheets and Nickel Sheets. He was shown certain container numbers and vehicle numbers (as per question NO. 12,13 14 of his statement dated 15.12.2006) which he has confirmed to have processed on job work basis and sent to units in Anand Prabat area. It was also confirmed by him that all the orders are received over phone and no details of the parties who get the job work done as indicated in the cash memos mentioned by them. He also confirmed that no vehicle numbers were mentioned in cash memos as parties getting the job work done insist that no details of their identity s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly indicated as O from Bhilad check post. Same is true of all the vehicles mentioned in the RTI information obtained by the appellant. As the in out entries in Transport Commissioners do not alternate it indicates that there are either alternate routes between Delhi and Appellants factory or the check post records are not reliable. Therefore, these records showing dates mentioned by the Gujarat Transport Commission may not be a proof whether any vehicle has moved between Delhi and appellants factory. Appellant has made the payment of freights through cheque and also paid the GTA service tax on the freights so paid. Further the inputs Nickel has been reflected in appellant s statutory records and the same has not been disputed by the Revenue. Further during stock taking also no shortage of Nickel cathodes was detected when shortage of only finished goods was noticed. In the entire proceedings no seizure of inputs cleared as such from the factory or diverted en-route from Delhi to Appellants factory has been made. In the absence of these corroborative evidences, recording statements of the transporters that appellants have not transported imported Nickel cathodes to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of the Revenue that Nickel cathode have not reached its destination. It is also an established fact that the suspicion, whosoever grave it may be, cannot take the place of documentary evidence. Statements recorded and relied upon by the Revenue cannot be considered to be conclusive piece of evidence without the appellant being given an opportunity to cross-examination. There is no positive statement in the present proceeding which convincingly convey that appellant has sold/diverted the imported goods to any other person and accordingly the case laws relied upon by the Revenue are not applicable to the fact and circumstances of this case. 9. Further, Hon ble High Court of Gujarat, in the case of Commissioner vs. Dhanlaxmi Tubes Metal Industries (supra), framed the following questions :- (i) Whether provisions of Rule 3 and Rule 9 provides for availing CENVAT credit on the basis of invoices only when such invoices are accompanied by same corresponding goods or credit is available even if some other goods, other than shown in the invoices, are received in the factory? (ii)?Whether the CESTAT was correct to allow a CENVAT credit on the basis of invoices when investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al of the order passed by the adjudicating authority indicates that the officers at the check post had entered the receipt of copper ingots in their record. Thus, even the official records maintained at the check post indicate receipt of copper. Merely because in the record of the transporter, two types of LRs had been issued in respect of the goods carried/transported by M/s. Singal Road Carriers which indicated transportation of miscellaneous goods and the other which indicated transportation of copper ingots/wire brass, the Department has jumped to the conclusion that copper ingots had not actually been transported. Except for the aforesaid evidence, there is no evidence whatsoever to indicate that M/s. Pranav Metal Mart, Nadiad had not received copper ingots or that the respondent assessee had not received the ingots along with the invoices. The statement of Shri Atul Navrattan Lal Sharma, Proprietor of M/s. Singal Road Carriers indicates that it is the categorical case of the said party that it had received raw material at its premises along with the LRs and other documents. The statement of the partner of the assessee, Shri Umesh Shah, also indicates that it was the categoric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrived at by the Tribunal being based upon findings of fact recorded by it upon proper appreciation of the evidence on record, cannot be said to be unreasonable or perverse. 9. For the foregoing reasons, there being no infirmity in the impugned order of the Tribunal, the same does not give rise to any question of law, as proposed or otherwise, much less a substantial question of law so as to warrant interference. The appeal is, accordingly, dismissed. 10. The facts of the case before the Hon ble High Court in Dhanlaxmi Tubes Metal Industries case (supra) were almost similar to the facts of the present case, therefore, ratio of the above case law will be squarely applicable to the facts of the present case, as there is no independent positive documentary evidence/statement confirming that imported Nickel has in fact has been diverted elsewhere and has not reached appellant s factory. 11. Another important fact has been brought on record by the appellant that as per certificate dated 27.08.2007 from Metallurgy Expert, Aviro Consultant, Ahmedabad to the effect that the finished Stainless Steel products manufactured by appellant contain Nickel percentage from 4 to 18.5% where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir duty paid character and use in the manufacture of end product has been established by the records maintained by the appellant along with their confirming statements that inputs have been used for the manufacture of the finished goods, and appeal to that extent is allowed. 13. So far as imposition of penalties upon the appellants is concerned, as the credit with respect to Nickel has been held to be admissible, personal penalties imposed upon all the appellants under Rule 15 of the Cenvat Credit Rules, 2004 are set-aside and corresponding equal penalty imposed under Section 11AC read with Rule 15 (2) of the Cenvat Credit Rules, 2004 is also set aside. However, for clandestine removal of finished goods, involving Central Excise duty of Rs. 12,43,861/- mentioned in para 4 above, personal penalties are required to be imposed upon Shri Dilipbhai C. Chandan, Director of the main appellant and Shri Praveen C. Jain vice President of the main appellant, under Rule 26 of the Central Excise Rules, 2002 as they could not satisfactorily explain the shortages/ clandestine removals. However, looking to the amount of duty evaded, penalties of Rs. 10,00,000/- (Rupees ten lack only) and Rs. 2,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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