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2015 (11) TMI 1039 - CESTAT MUMBAI

2015 (11) TMI 1039 - CESTAT MUMBAI - TMI - CENVAT credit - Bogus invoices - No dealing with physical of goods - Fraudulent availement of credit - Imposition of interest and penalty - Held that:- All the five traders/bidders based in Viramgam have admitted that the freight charges were being paid by them or the buyer of the goods when such HR trimmings were being unloaded at Viramgam or nearby area. These statements leads to far more credibility than the bald claim of the main appellant. Further, .....

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ly indicates the vehicle number, date, weighment of the goods, the destination where the goods are unloaded and other details.

Number of other officers were offered for cross-examination and were cross-examined. We do not find any consequence coming out from such cross-examination. We have also gone through the various case laws submitted by the appellant relating to cross-examination. We find, as mentioned earlier, the two persons who did not turn up for cross-examination are the co .....

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d on the HR trimmings. In view of the said position, in our view, the goods are confiscable under Rule 25(1)(d) and penalty is also imposable on the appellants. - Decided against the assessee.

Levy of penalty for abetment - That a person would render himself liable for penalty for indulging in activities mentioned in Rule 26 of the Central Excise Rules, 2002, even if goods are not confiscated or had not been rendered liable for confiscation. We also note that as in that case, even in .....

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to indicate the name and address of the main appellant in the present case and since they have changed the name of the consignee in spite of the fact that the goods were being transported to Viramgam or nearby area in different State. The goods are therefore liable for confiscation as discussed earlier and they are liable to penalty. - However, Penalty imposed on some appellants are reduced. - E/722/2008-MUM, E/652/2008-MUM, E/733/2008-MUM, E/736/2008-MUM, E/737/2008-MUM, E/738/2008-MUM, E/656/ .....

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RDER Per: P.K. Jain: Brief facts of the case are that M/s. Ispat Industries Ltd., (appellant No. 18) is a manufacturer of H.R. coils having manufacturing units in Kamleshwar, near Nagpur and Dolvi/Taloja near Mumbai. During the manufacture of such coils trimmings are obtained which are in the form of coil only but of width of 1 to 3. Such H.R. trimmings are used in the manufacture of MS wires. Such wires, in turn, are used for the manufacture of nails, barbing, fencing, etc. The manufacture of M .....

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certain traders based in Viramgam (appellant Nos. 11, 12, 13, 14, 15 and 16) and also Indore based traders (appellant Nos. 9 and 10). Such HR trimmings are cleared by appellant No. 18 on payment of appropriate Central Excise duty and by issuing corresponding invoices indicating details of duty payments. Since the material is used by small scale industry which are not required to pay excise duty, CENVAT credit of duty paid on such H.R. trimmings are not available to SSI units. Duty paying invoice .....

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or scavenger scrap which is non-duty paid. Credit of duty paid on particular goods is available only if the goods covered by the invoice is used by the availer of credit. The invoices issued by appellant No. 18 were therefore, being manipulated to indicate the name of certain manufacturers of MS ingots or the first stage excise registered dealer (in the present case, by the main appellant or appellant No. 5 and 6). Thus, the main appellant, in the present case was purchasing the invoices withou .....

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hem, then the corresponding invoices of appellant No. 18 would indicate the name of the buyer as appellant No. 5 or 6 and the consignee as appellant No.1. As far as appellant No. 7 and 8 are concerned, they were not registered with the excise department and hence their name was not appearing in any of the document. However appellant No. 4 to 8 were locating the customers for such invoices, who were purported buyer/consignee in CENVATable invoices without actually receiving the corresponding good .....

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on of the broker/traders (appellants Nos. 9 to 16) or brokers/dealers (appellant Nos. 4 to 8). Appellant No. 17 was also ensuring that documents received from Appellant No. 18 are sent to main appellant or broker/dealers (appellant No. 4 to 8). Further, appellant No. 17 was handing over fictitious documents to the driver from Kamleshwar/Nagpur to Viramgam for any checking during transportation. Similarly, appellant No.16 is a transport-commission agent who was transporting the HR trimmings from .....

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lvi/Taloja unit. 3. Thus, the case of the Revenue is that the main appellant in the present case has availed CENVAT credit on the basis of duty-paying invoices issued by appellant No. 18 without receiving any HR trimmings covered by such invoices. The main appellant was, therefore, not eligible to take the CENVAT credit covered by such invoices, and the act is fraudulent in nature and is therefore liable to pay the credit so availed, interest and penalty. Case against appellant No. 2 to 18 is fo .....

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ters to show as if some of the consignments were being handled by the said transporter. Investigation revealed that no transporter with the said name at the said place existed. Investigation also revealed that registration numbers used in some of the invoices are of three wheelers, autorikshaws, oil tankers or Government vehicles which would not be suitable for transporting scrap. Statements of few vehicle owners were also recorded which indicated that they did not transport any HR trimmings fro .....

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tra to Gujarat. Statements of various persons confirmed that HR trimmings were sent to Viramgam and nearby areas and only invoices are made in the name of main appellant. 5. Based upon detailed investigation, a demand notice dated 03/05/2006 was issued to the main appellant for demand, interest, penalty as also to other appellants for penalty. After receiving the replies, allowing cross-examination, the Commissioner vide the impugned order adjudicated the case wherein he confirmed the demand, in .....

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xamination. The learned counsel s grievance was mainly with reference to Mr. Pawan Agarwal (appellant No. 4) and Mr. Manish Agarwal, (appellant No. 8) as also Shri A.P. Dutta, Investigating Officer of DGCEI, who investigated the present case. The learned counsel further submitted that the statements of witnesses who had not turn up for cross-examination have no evidentiary value and in support of the same he submitted the following case laws: (i) Arsh Casting vs. Commissioner of Central Excise 1 .....

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ubber Works vs. Commissioner of Central Excise 2006 (205) ELT 993 (viii) Sharma Chemicals vs. Commissioner of Central Excise 201 (130) ELT 271 (ix) Hingora Industries vs. Commissioner of Central Excise 2014-TIOL-2461-CESTAT-AHM (x) Senthil Kumar Soap Works vs. Commissioner of Central Excise 1997 (89) ELT 77 7. The next submission of the learned counsel for the first three appellants is that the impugned order has been passed on the basis of assumption and presumption without proper corroboration .....

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ing change in billing address of auctioned scrap. It was also submitted that the investigation does not reveal actual amount of cash transaction between Viramgam brokers and Mr. Manish Agarwal, who is alleged to have converted cash into Demand Draft for lifting the HR trimmings from M/s. Ispat Industries Ltd. Further, no investigation was conducted at the octroi post between Gujarat and Maharashtra border. It was also submitted that the vehicles mentioned in Annexure B to the show cause notice a .....

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appellants No. 5 and 6 are not relevant. It was also submitted that the statements of Viramgam based trader do not have evidentiary value. The learned counsel further submitted that the absence of lorry receipts does not prove that the scrap from Ispat Industries is not received by the appellants. It was submitted that the main appellant availed credit on the basis of valid invoices and nowhere the law prescribes that lorry receipts is a necessary documents. It was submitted that for movement o .....

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liance placed on the third party evidences, in the absence of corroborative evidence is inadmissible. It was further submitted that statement of Shri Manish Agarwal has no evidentiary value, that payments made by them during investigation was made under protest. It was submitted that certain scrap was received from Ispat Industries which was admitted by the Commissioner in the impugned order. It was also submitted that payment to M/s. Ispat Industries for lifting of scrap is through Demand Draft .....

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also submitted the following case laws: (a) Commissioner of Central Excise vs. Juhi Alloys 2013 (296) ELT 533; (b) Commissioner of Central Excise vs. Tata Motors 2013 (294) ELT 394 (Jhar.) 8. It was also submitted that the denial of recovery of CENVAT credit should be restricted to invoices mentioned in Annexure B3 to the show cause notice as there is no corresponding evidence for the remaining demand and in support of this contention the learned counsel quoted the following case law: (a) Alfa .....

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s, 2002 was not in existence at the time of issuance of show cause notice and therefore the impugned order confirming penalty under the said Rules were illegal. Further penalties under Rule 26 is not imposable as there is no whisper or proposal about the confiscability of any excisable goods in the show cause notice nor any finding in the impugned order. Following case laws were submitted in support of this contention: (i) Castrol India Ltd. vs. Commissioner of Central Excise 2008 (222) ELT 408; .....

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there is no findings about the role of the appellants. Further, the department has not investigated the role of Viramgam based broker. It was further submitted that no penalty is imposable under Rule 26 as there is no proposal to confiscate the goods in the show cause notice and in support of the same, the learned counsel submitted the following case laws: (i) Elengo Ravi 2006 (198) ELT 47 (Tri.-Bang.) (ii) Santogen Silk Mills 2006 (199) ELT 69 (Tri.-Mumbai) (iii) Cosmo Films Ltd. 2006 (202) EL .....

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on appellants Nos. 4, 5 and 6 is on a very high side and as against this a penalty of ₹ 10 lakhs is imposed on appellant No. 2 and 3 and in view of this position, the penalty should be substantially reduced. 13. The learned counsel for the appellant No. 5, in addition to the above, submitted that the statements of Shri Pawan Agarwal was recorded with reference to a computerized calculation based upon the records of Shri Chandrakant Nathwani and it was submitted that as per the statement, t .....

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of which no investigation was made. 14. The learned counsel for appellant No. 7 submitted that this is a proprietary concern of Shri Ramavtar Aggarwal and he has not given any power of attorney to his son Shri Manish R Aggarwal. Shri Manish R Aggarwal helps his father in the working of M/s. Manish Steel Corporation. He further submit that Manish Steel Corporation is nowhere connected with the commission agent business carried out by Shri Manish Aggarwal and the said firm is nowhere connected nor .....

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n agents for finding customers for the excise invoices of goods so sold in on-line auction process. He further submitted that his role was only for finding customers who required Central Excise invoices and he has to pay by Demand Draft on their behalf to appellant No. 18. He further submitted that he has only helped in the sale of excise invoices or transfer of funds through angadia services and he has not dealt with the physical delivery of the goods. It was submitted that since his client has .....

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at the adjudicating authority in para 253 of the impugned order has observed that change in billing address is a common in the said business and it is not an irregular or illegal activity. It was further submitted that the show cause notice only makes a general allegation about all co-noticees and does not enumerate the exact role of the appellant. The learned counsel submitted that in the impugned order there is no finding that the goods are liable to confiscation and, therefore, the penalty un .....

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cannot be imposed. The learned counsel for appellant No. 9 submitted that his client has confirmed in the statement that they have not received any goods or any Central Excise invoices and has only participated in the auction and thereafter has transferred their right to procure the goods at fixed price by giving letters for change in the name which is permitted under the said auction scheme. It is submitted that they have not physically dealt with the goods or excise invoices and therefore pena .....

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y transferred their right to lift the goods by giving the change in the billing address which is not illegal. The learned counsel submitted that no penalty can be imposed under Rule 26 on them for the reasons mentioned earlier. 19. The learned counsel for appellant No. 17 main contention was that, as far as his client is concerned, his client is only a commission agent and he gets a fixed amount for arranging the truck. He has no role in actual transportation of the goods or in any other manner. .....

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re, there is no question of any penalty on his client under Rule 26. The learned counsel also quoted few judgments in their own case wherein no penalty was imposed on his client. 21. The learned Additional Commissioner (AR) reiterated the various points made in the investigation. The learned ARs first submission is that the learned counsel for the main appellant has not stated anything in defence of the allegation made against the main appellant but has only attempted to find out some imaginary .....

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goods. There was no goods receipt note. There was no weighment slip from an independent weighing bridge. There was no transport documents whatsoever to indicate the transportation of the goods from Kalmeshwar/Nagpur or Dolvi/near Mumbai to their unit in Nasik. In the absence of any of these documents it cannot be said that the goods covered by the said invoices were transported to appellants unit and received by the appellant. It was further submitted that one of the points made in the show ca .....

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rly stated the truth. It is not in dispute that the appellant himself has never participated in the online auction. It is also a fact that in all the online auction bidders were mainly from Viramgam or Indore. The reason for Viramgam is that the HR trimmings were required in the units located in and around Viramgam. It was also submitted that if we carefully go through the statements, the appellant No. 3 who is the General Manager of the main appellant, in his initial statement, have stated in h .....

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, except making bald statements no consignmentwise details of the freight amount paid and the corresponding documents such as voucher, etc. have been produced at any point of time, either during adjudication or before this appellate Tribunal. The learned AR further submitted that Rule 7 of the CENVAT Credit Rules cast obligation on the appellant to prove that the CENVAT availed by him is corresponding to the goods received by him. The learned AR further submitted that the department has permitte .....

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llant. 22. As far as appellant No. 2 and 3 are concerned the learned Additional Commissioner (AR) submitted that these people were the Managing Director and General Manager who were looking after the day to day affairs of the company and such thing cannot happen without their active connivance and therefore they are liable to penalty. As far as appellants Nos. 4, 5, and 6 are concerned, they are the people who were instrumental or link between the invoice seller and the invoice purchaser i.e., b .....

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ir letter that the above fraud has taken place. It is they who wanted to sell the CENVATable invoices to persons who wanted the invoices and they sold the goods separately to persons who wanted only the goods and not the invoices. Learned AR submitted that they were actively involved with acquiring, transferring, purchasing, selling of the goods and perpetuated the fraud and they have been correctly imposed penalty under Rule 26. As far as appellant No. 16 and 17 is concerned, the learned AR sub .....

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in the name of fake transport company based in Raipur, Chatishgarh, namely, Sidhivinayaka Road Carriers when no such transporter exist at that address. This was to cover up the illegal activities. Appellant No. 17 and 16 were concerned in the transportation of the offending goods. It was also submitted that as far as appellant No. 18 is concerned, it is on record from the document recovered from them that they were aware that the goods are being transported and are going to Gujarat and are being .....

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in Viramgam. But their document/invoices showed Maharashtra based Ingot manufacturers / steel furnace units. Further, almost all invoices indicate Gujarat registered vehicle who are not permitted to move freight from one place to other in Maharashtra. Some of the vehicles were three wheelers, oil tankers, etc. In view of the said fact, penalty is impossible on appellant No. 18. The learned AR relies on the judgment of this Tribunal in the case of main appellant Bhagwati Steelcast Ltd. vs. Commi .....

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onding invoices. A somewhat similar issue has come up before this Tribunal in another case of main appellant viz. Bhagwati Steelcast Ltd. vs. CCE, Nashik reported in 2013 (293) ELT 417. In para 73 of the said order, this Tribunal has explained the scheme of the cenvat credit and is reproduced below for ready reference:- 73. It follows from the above that the? method of implementation adopted in India is the tax credit method. This economic concept of Value Added Tax has been encapsulated within .....

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ble under the Finance Act, 1994 used in or in relation to the manufacture of excisable goods. 73.2 Rules 11 of the Central Excise? Rules, 2002 stipulates that no excisable goods are to be removed from a factory or warehouse except under an invoice signed by the owner of the factory or his authorised agent. Sub-rule (2) of the said Rule stipulates that the invoices shall be serially numbered and shall contain registration number, address of the concerned Central Excise Division, name of the consi .....

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ule shall apply mutatis mutandis to goods supplied by a first stage dealer or a second stage dealer. Similar provisions were stipulated in the Central Excise Rules, 2001 and also the Central Excise Rules, 1944 to the same effect. 73.3 The Cenvat Credit Rules, 2004, deal with the procedure relating to availment of credit. As per Rule 3, a manufacturer or a producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as Cenvat credit) of the .....

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nd this includes an invoice issued by a manufacturer, an importer, a first stage dealer or second stage dealer. Sub-rule (2) further stipulates that no Cenvat credit shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994 are contained in the said document. In case any particulars are missing, Cenvat credit may be taken only with the prior approval of the jurisdictional Asst./Dy. Commissioner of Central Excise, if he is satisfie .....

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ch duty was paid by the producer of such input or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him. Sub-rule (5) further stipulates that the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacturer or provider of output service taking such credit. Similar provisions existed in Rule 57A of the Central Excise Rules, 1944, Rule 7 of the Cenvat Credit Rules, 2001 and 2002. 73.4 From the above provi .....

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the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such goods and only an amount of such duty on pro rata basis has been indicated in the invoices issued by him. It is further stipulated that the burden of proof regarding admissibility to Cenvat credit shall lie upon the manufacturer taking such credit. Sub-rule (2) of Rule 7 of the Cenvat Credit Rules, 2001/2002 (as they stood at the relevant time) further stipulated that a manufacturer/producer .....

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his personal knowledge or on the strength of a certificate given by a person with whose handwriting or signature he is familiar with or on the strength of a certificate issued to the manufacturer or supplier by the jurisdictional Superintendent of Central Excise. 73.5 The Central Excise duty regime underwent a significant change with effect from 1-10-1996. Under the new regime, assessment of the tax liability by the department which hitherto existed was done away with and self assessment facilit .....

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would be required to furnish to the excise department will be a simple Return indicating the duty paid on self-assessment basis. Wherever possible the assessees computers could also be linked to the Departments computers for on line assessment. 135. I also propose to introduce a scheme of selective audit by?the excise officers and dispense with the existing scheme of routine examination and checking of returns and documents furnished by the assessees. This scheme would also come into force from .....

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Rules. It is also a matter of concern that there is misuse of the Modvat credit scheme. At present, Modvat invoices can be issued by any dealer registered with the excise department and this facility is reportedly being misused. Therefore, I propose to restrict the issue of Modvatable invoices by dealers up to two stages. Suitable provisions are also being made in the Modvat Rules for charging of interest in the case of wrong availment of Modvat credit and for mandatory penalty for misuse of Mod .....

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at Industries is concerned but can be used for the manufacture of MS wires which has vide variety of applications like in the manufacture of nails, fencing wire, etc. It is also common knowledge that such HR trimmings fetch higher value than the scavenger scrap or bazaar scrap. There is no reason for any prudent MS ingots manufacturer to use such HR trimmings in coil form for melting. We find that the main appellant has not produced any independent evidence whatsoever to support that the H.R. tr .....

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of such H.R. Trimmings. In fact, if the H.R. Trimmings were received by them, there was no reason that the appellant could not have produced such transportation details during the adjudication of the case or before this Tribunal. It is strange that the General Manager of the main appellant in the initial statement claimed that the transportation is being arranged by M/s. Ispat Industries and the freight is being paid by them. It was only during confrontational joint statement that he was compell .....

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that the freight charges were being paid by them or the buyer of the goods when such HR trimmings were being unloaded at Viramgam or nearby area. These statements leads to far more credibility than the bald claim of the main appellant. Further, we find that it is undisputed that consignments were transported through the trucks having Gujarat registration Number. For the transportation of the goods within the State of Maharashtra such trucks cannot undertake this activity. None of the appellants .....

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g to Viramgam. It is also clear that in large number of cases Shri Chandrakant Nathwani was coordinating with M/s. Ispat Industries Ltd.s office to get the name of the consignee/buyer changed based upon the letter from the original bidder. The Register A5 and A7 recovered from M/s. SKT are reliable evidences. Shri Chandrakant Nathwani during cross-examination stuck to his statement. Even the learned counsel for the main appellant has admitted during the hearing that he cannot deny the irregular .....

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at the goods were sold in Viramgam or nearby area and for selling invoices they got in touch with Shri Pawankumar Agarwal or Manish Agarwal i.e. appellant No. 4 and 8, who in turn found the customers for the CENVATable invoices. It is also clear from the statement that many a times the cash was sent to appellants Nos. 4 and 8 to get the same converted into Demand Draft and submitted to M/s. Ispat Industries Ltd. Sometime, even the bidders themselves have got the demand drafts and sent either to .....

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would stand on its own foot. We also note that no statements of Shri A. P. Dutta were recorded. Even Shri Duta presented himself on one occasion for cross-examination but could not be cross-examined. We also note that number of other officers were offered for cross-examination and were cross-examined. We do not find any consequence coming out from such cross-examination. We have also gone through the various case laws submitted by the appellant relating to cross-examination. We find, as mentione .....

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s of natural justice by not offering the witnesses for cross-examination by the appellant Ashish Kumar Chaurasia, despite his request that all witnesses should be examined. We have already noted that the appellant, Ashish Kumar Chaurasia had cross-examined two officers on 19-6-1995. It also transpires that summons were sent to Ram Avatar Singhal, Ram Kumar Mishra and Ram Bilas Mandal (driver), Jagdish Shanker Trivedi and Dilip Kumar Singhal, who refused to be cross-examined on the ground that th .....

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s not specify any right of cross-examination. 24. In any case, even if we ignore their statements, we do not see that it will make any difference in the conclusion. In view of this position we reject the contention of the learned counsel for the appellants, as far as it relates to cross-examination. 25. Another contention of the learned counsel was that order was based upon assumption and presumption without corroboration. We are unable to accept this view. In fact we find that the case was very .....

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the fact is that such modus operandi was being used and few numbers will not make any difference. While it may be true that there is no requirement under the Central Excise Rules to keep the lorry receipts, but when the transportation of the goods is being questioned and the Revenue has been able to produce a catena of evidences, the appellant was required to produce at least some independent evidences relating to the transportation of the goods from Nagpur/Dolvi to their unit. We find that the .....

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s to why these are wrong. On the contrary, he accepted and even made a part payment of duty liability and promised to pay the remaining amount. 26. The learned counsel s contention that there is no investigation on alleged movement of scrap lifted in the name of the appellants from Ispat Industries to SSI units located at Viramgam, we do not find any force in the said contention as records recovered from transporter/transport commission agent proves beyond doubt, and statements of the transporte .....

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placed on the statements of Shri Vishnubhai Patel, Manger of M/s. Nar Narayan Transport and records seized from them is incorrect. In fact, in our view, reliance should be placed on these statements as M/s. Nar Narayan Transport were the actual transporter of the goods from Kalmeshwar to Viramgam. Similarly, statements of Viramgam based traders have evidentiary value. Similarly we find other contentions are baseless. Appellants counsel instead of presenting any positive evidence to support tha .....

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he contention that the statements of Shri Manish Agarwal and Shri Pawankumar Agarwal is of no consequences is required to be outrightly rejected. The fact that the payment to M/s. Ispat Industries is made through Demand Draft does not in any way negate the fact that the goods were not received by the appellant but were diverted to Viramgam. Since M/s. Ispat Industries Ltd. wanted payment through Demand Draft the drafts were made sometime by the appellant after receiving the cash through Angadia .....

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goods. The fact that the unit was audited will not make any difference as during audit all that is checked up is the invoices with reference to the credit availed. We find that the whole case is based upon the information received and such modus operandi cannot be detected during the audit. The fact that the appellant was only receiving the invoices and not the goods was never in the knowledge of the department. Even otherwise, even if it is in the knowledge of the department, it is an act of f .....

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al Excise vs. Tata Motors (supra). The facts in that case are totally different as mentioned earlier. 29. The learned counsel also submitted that the demand may be limited to based upon A5 and A7 register. We do not find any merit in the said contention. The said two documents were recovered and are for a limited period. However, the same modus operandi was being followed and the investigations are based upon the details of the auction conducted by M/s. Ispat Industries Ltd, the invoices on whic .....

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ioner of Central Excise 2011 (272) ELT 225 and the facts in all the three cases are totally different. In the present case, the appellant has not been able to produce any evidence whatsoever in respect of any consignment covered by the notice which has been received by them and therefore, we uphold the impugned order in respect of appellant No.1 and reject the appeal. 30. The learned counsel also submitted that penalties on Shri Mahendra Kumar Agarwal, appellant No.2 who was the Managing Directo .....

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T credit fraudulently and thereby evade payment of duty, we hold that the goods are liable to confiscation under Rule 25(1)(d) and, therefore, penalties under Rule 26 on appellants No.2 and 3 are correctly imposed and accordingly their appeals are rejected. 31. As far as Shri Pawan Kumar Agarwal, appellants Nos. 4, 5 and 6 are concerned, we note that these appellants were instrumental in finding the buyer of the CENVATable invoices thereby helping in the fraudulent availment of the CENVAT credit .....

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lakhs and on appellants Nos. 5 and 6 to ₹ 2 lakhs each. 32. As far as appellant No. 7 is concerned, learned counsel for the appellant has submitted that the said company was owned by Shri Ramavtar Aggarwal who was not concerned with any of these transactions and all these transactions have been done by Shri Manish Agarwal in his personal capacity. We find from the appeal filed by M/s. Manish Steel Corporation that M/s. Manish Steel Corporation is a sole proprietary concern of Shri Ramavta .....

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s. Manish Steel Corporation in diverting the goods to Viramgam and invoice to the main appellant, the goods are liable to confiscation and the penalty imposed on M/s. Manish Steel Corporation is upheld. However, penalty imposed on M/s Manish Steel Corporation is reduced to ₹ 8 lakhs. 33. As far as Shri Manish Agarwal is concerned he was definitely concerned in dealing with the said goods and actively involved in diverting the goods to Viramgam and invoices to main appellant. These goods ar .....

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le 25 - Confiscation and Penalty. (1) Subject to the provisions of Section 11AC of the Act, if any producer, manufacturer, registered person or a warehouse or a registered dealer, - (a) remove any exciseable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any exciseable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage or any exciseable goods without h .....

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ntion of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [rupees two thousand] whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice. Rule 26. Penalty for certain offences : (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals .....

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ely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of CENVAT Credit under the CENVAT Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater. In the present case, the purported consignee as per the invoice was different from the actual consignee who were Viramgam based traders. Thus, the manipulation in the name of consignee was done with the sole purpos .....

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ules, 2002, even if goods are not confiscated or had not been rendered liable for confiscation. We also note that as in that case, even in the present case all the appellants have full knowledge about every stage of removing, keeping, selling, concealing the excisable goods and the same would not have been possible without their active participation and connivance with each other. We also note that the said judgment of the Hon ble Gujarat High Court has been upheld by the Hon ble Supreme Court a .....

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itted prior thereto. 10. Inspite of non-applicability of Rule 26(2), penalty could be levied as the appellant was concerned in selling or dealing with the goods which were liable to confiscation inasmuch as the appellant claimed to have sold the goods in respect of which the cenvat credit was taken. In such a case, Rule 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or .....

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y be found in person who actually evades the duty and the person who enables the same to be done. This distinction in culpability may be required to be gone into from case to case. The Tribunal does not seem to have been conscious of this issue. 12. The penalty prescribed is admittedly not the minimum. Its quantum will thus be in discretion to be exercised having regard to mitigating or aggravating circumstances. In the context of exercise of discretion of imposition of appropriate sentence, it .....

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a to correctly assess various circumstances germane to the consideration of gravity of crime, the discretionary judgment in the facts of each case, is the only way in which such judgment may be equitable distinguished. Since in the present case the Tribunal has not considered the issue of quantum of penalty, the matter may require fresh consideration of the Tribunal to determine the quantum of penalty which ought to be levied on the appellant. Accordingly, we allow these appeals partly as above .....

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hat the said transporter was concerned with only consignments transported from Dolvi and we also note that in the present show cause notice, majority of the consignments are from Kalmeshwar and in view of this fact the penalty imposed on M/s. Diamond Roadways is reduced to ₹ 2 lakhs. 38. As far as penalty on Shri Chandrakant Nathwani, appellant No. 17 is concerned, we find that he was not only arranging the transportation of the goods and he was in full knowledge and was actively involved .....

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eported in 2010 (254) ELT 26 (P&H). 39. As far as the appellant No. 18, M/s. Ispat Industries Ltd. is concerned, while we note that before clearing the goods they have paid the appropriate amount of duty. However, we also note that the goods were being transported in the Gujarat registered vehicle while the consignee name and address is that of Maharashtra, and such vehicles cannot take such freight. We also note that from the documents recovered from their premises, it was very clear that t .....

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ble to penalty. We have also gone through the few judgments quoted by learned counsel in their own case. These judgments were passed by the Single Member of this Tribunal. More over the said judgments have been passed before the judgment of honble Punjab & Haryana in the case of Vee Kay Enterprises vs. Commissioner of Central Excise reported in 2011 (266) ELT 436 (P&H) as also in the case of M.S. Metals vs. Commissioner of Central Excise, Haryana 2014 (309) ELT 241 (P&H). Keeping in .....

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