TMI Blog2015 (10) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... by an asessee Gujarat High Court in the case of Commissioner Vs. Motabhai Iron and Steel Industries [2014 (10) TMI 723 - GUJARAT HIGH COURT] - in this case larger bench held that oral evidence made by the Managing Director of the appellant and the positive documentary evidence recovered from the factory were of clinching nature. However as already mentioned in the present proceedings there is no confessional statement regarding diversion of inputs by the main appellant. The statements of Shri Rajeshwar Prasad R Dubey, proprietor of PSTC, recorded at different times are contradictory, and cannot be relied upon as evidence in the absence of any cross-examination and corroboration - Decided in favour of assessee. - Appeal Nos. E/94-96/2012-SM - Order No. 11137-11139/2015 - Dated:- 23-7-2015 - H K Thakur, Member (T) For the Petitioner : Shri Alok Barathwal, Adv For the Respondent : Shri L Patra, AR ORDER Per H K Thakur These appeals have been filed by the appellants against OIA No. SA/173-175/VAPI/2011 dated 11/11/2011 passed by Commissioner (Appeals), VAPI under which OIO No. 08/JC/OA.VAPI/2011-2012 dated 18/08/2011 passed by Adjudicating Authority has been up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigation has been done from the drivers of the vehicle as to how and where the imported goods were delivered/unloaded. That no cross examination of the witnesses, whose statements were relied upon has been made available and that in the absence of such denial of Cross Examination the evidentiary value of the statements is lost. That in statement dated 24/09/2009 of Shri Pravin Kumar A Ranka, Partner of the main appellant, has stated that imported goods were received, recorded in the statutory records and used in the manufacture of finished goods. It is the case of the appellant that Credit was taken on the basis of Bills of entry and there could be a difference in the date of receipt of goods and credit taken because sometimes duty paying document are received late. It was also argued by the Learned Advocate that no alternative procurement of raw materials by the main appellant has been brought on record. It was strongly argued by the Learned Advocate that a case cannot be made on the basis of few statements, especially when Cross Examination of the relied upon witnesses was not allowed. That no Seizure of diverted inputs or Seizure of any cash was affected in any of the premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. Learned Authorised Representative, therefore, strongly defended the orders passed by the lower authorities. He relied upon the following Case Laws in Support of his arguments:- (i) Ahmednagar Rolling Mills Pvt. Ltd. Vs. CCE, Aurangabad [2014 (300) E.L.T. 119 (Tri-Mumbai)] (ii) Shalini Steels Pvt. Ltd. Vs. CCE, Hyderabad [2010 (258) E.L.T. 545 (Tri-Bangalore)] (iii) Debu Saha Vs. Collector of Customs [1990 (48) E.L.T. 302 (Tribunal)] 4. Heard both sides to these appeals and perused the case records. The case is made against the main appellant M/s Sunland Alloys for clandestinely taking Cenvat Credit on imported scrap of copper without receipt of inputs in appellants factory. It is the case of the Revenue that copper scrap imported under the bills of entry have been diverted at Bhiwandi as per the statements of Shri Rajeshwar Prasad R Dubey, Proprietor writer of PSTC. Further Revenue has relied upon certain letters written by M/s J.N. Baxi and M/s NYK Link (I. Ltd.), who are the container providers in which imported scrap was transported from the port of import. As per the date of containers received back by the container provider, as reported by container provider, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -10 an 14:- 10. Insofar as the general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. This is clear from the observations contained in Swadeshi Polytex Ltd.(supra) and Laxman Exports Limited (supra). Apart from this, the decision of this court in J K Cigarettes Ltd.(supra) clinches the issue in favour of the appellant. In that case, the validity of Section 9D of the Central Excise Act, 1944 reads as under:- 9D. Relevancy of statement under certain circumstances.- (1) A statement made and signed by a person before any Central Excise Officer of a gazette rank during the course of any inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains:- (a) When the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make his submissions in this behalf. It goes without saying that the authority would record reasons, based upon the said material, for such a decision effectively. Therefore, the elements of giving opportunity and recording of reasons are inherent in the exercise of powers. The aggrieved party is not remediless. This order/opinion formed by the quasi judicial authority is subject to judicial review by the appellate authority. The aggrieved party can always challenge that in a particular case invocation of such a provision was not warranted. 5. The same view was taken by us in the case of Sakeen Alloys Pvt Ltd. Vs. CCE Ahd, [2013 (296) E.L.T. 392 (Tri-Ahmd.)]. Revenue did not accept this order and filed appeal in the jurisdictional High Court Hon'ble Gujarat High Court in this case held that confessional statements solely, in the absence of any other corroborative evidence, cannot make the foundation for levying excise duty. Appeal filed by the department against this order of Gujarat High Court has also been dismissed by Supreme Court as reported in [2015(A 118) E.L.T. 319] in the present case there is not even a confessional statement from the main appellant that inputs w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods were also found to be entered in its statutory records. That the Department had not made any investigation of the unit of the assessee, which could have supported the findings of the adjudicating authority. None of the consignors of the goods have denied the clearance of goods to the assessee. There was no evidence on records to show that the records maintained by the assessee were not correct. The Tribunal, was according of the view that on the basis of statements of some transporters which were not corroborated by any material on record, a huge credit could not be disallowed is under these circumstances that the Tribunal has set aside the demands and the penalties imposed upon the assessee and the co-noticees. 6. Similarly in the case of Commissioner of Central Excise, Ludhiana Vs. P.J. International Ltd. [2010/ (255) E.L.T. 418 (Tri-Del), it was held by CESTAT-Delhi that once statutory records are maintained by an appellant, which is not doubted by the department, then by mere tallying numbers and dates of LR's and GR's in a statement, cannot be made a conclusive and satisfactory basis for diversion of inputs. In present case there is no evidence that diversio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents recovered pertained to production and clearance of tin containers. He also stated that amongst other supervisors, even Awadesh Kumar Saxena, Electronics Engineer looked after the production and clearance of the goods of the factory. The authorized signatory of the appellant Girijesh Kumar Rai, confirmed in his statement recorded on 28-9-1998 that the records shown to him were withdrawn from the factory of the appellant in his presence and that he had put his signatures on the said documents at the time of withdrawal on 1-9-1998. The Electronics Engineer, Shri Awadesh Kumar Saxena in his statement dated 28-9-1998 admitted that the portion of daily production reports note-book pertaining to the appellants was prepared by him and that challans and daily production reports which bear his signatures, were prepared by him and they were of the appellant firm. According to him, the daily production report depicted the number of tin containers produced/ manufactured on a specific day. Whenever, he prepared the daily production report/challan he submitted the original copy to the Managing Director. The facts revealed by the Managing Director, Shri Yogesh Garg, the authorized signatory, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recovered documents was admitted by the partner Yogesh Garg [noticee No. (2)] and noticee No. (6) (Girijesh Rai) who also admitted that the record pertained to unaccounted for production and clearance of the tin containers by the appellant. Any subsequent retraction by Shri Awadesh Kumar Saxena has been rightly held to be an after thought to protect the noticees. This is not a case where any defence was taken up about less consumption of electricity that would have impelled the Revenue Officers to examine consumption of electricity. When production and removal of excisable goods in a clandestine manner is established by such positive documentary evidence and the oral evidence of the managing partner and the supervisor, it cannot be said that the Commissioner committed any error in holding that the appellant had manufactured and cleared tin containers in a clandestine manner. The quantum of liability which is worked out, has not been disputed before us. We find ourselves in complete agreement with the reasoning and findings of the learned Commissioner in holding that the charge of clandestine removal of tin containers by the appellants was established beyond doubt. No further corro ..... 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