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M/s Nirmal Inductomelts Pvt Ltd, M/s Balaji Industrial Products Ltd, Shri Madhu Sudan Somani, Shri Bharat Bhushan Malik, Shri Pankaj Agarwal Proprietor Versus Commissioner of Central Excise And Service Tax, Jaipur

2016 (1) TMI 881 - CESTAT NEW DELHI

Denial of CENVAT credit - non receipt of goods - only procuring invoices - absence of cross examination - Held that:- Cross examination of the witness is required to arrive at a fruitful decision of the case. Admittedly in this case, the cross examination was denied to the appellants. As no other corroborative evidence has been produced by the Revenue to deny Cenvat Credit. Therefore, merely on the basis of the statements of transporter / owner / driver of the vehicle, the cenvat credit cannot b .....

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are in appeal against the impugned order demanding duty along with interest and imposing penalty on all the appellants. 2. The facts of the case are that M/s. Nirmal Inductomelts Pvt. Ltd., Balaji Industrial Products Ltd., Shri Madhu Sudan Somani, Shri Bharat Bhushan Malik and Shri Pankaj Agarwal Proprietor manufacturers have engaged in activity manufacturing of MS Ingots and procuring scrap (inputs) from the open market. On the premises that the appellants are not procuring goods from M/s. R.N. .....

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by M/s. R.N. Enterprises a registered dealer. The proceedings were initiated against the appellant by issuance of the show cause notice. Same was adjudicated by denying Cenvat Credit availed by the manufacturers on the strength of the invoices issued by M/s. R.N. Enterprises. Consequently, demand on duty was confirmed along with interest and various penalties on of the appellants were imposed. Aggrieved from the said orders, appellants are before me. 2. The Ld. Counsel appearing on behalf of th .....

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r of the vehicle were granted to the appellants to defend their case. Therefore, the order of denying Cenvat Credit is in gross violation of principle of natural justice as held by the Hon'ble Apex Court in the case of Andaman Timber Industries Vs. CCE Kolkata-2015 (324) ELT 641 (SC). Therefore, the impugned orders are to be set aside. It is further contended that no other corroborative evidence has been produced by the Revenue to deny Cenvat Credit except the statement of the transporter / .....

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product which has been cleared on payment of duty. Therefore, the investigating team has not put contrary evidence on record as during the course of visit to the manufacturer appellant's factory nothing incriminating was found and it is also not proved from where the inputs were procured, therefore, the demands are not sustainable. He further submits that the show cause notice has been issued by invoking extended period of limitation as period of dispute is 20.01.2005 to 31.03.2007 whereas .....

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rts have not transported the goods to the appellants. Therefore, the Adjudicating authority has rightly denied the Cenvat Credit. 4. Heard the parties. Considered the submission. 5. In this case, the allegation against the appellants is that they have not received the goods in their factory physically but have received only the invoices. To confirm this, the adjudicating authority have relied on the statement of transporters / drivers / owners of the vehicles whose vehicle numbers have been ment .....

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ecord by the Revenue and the demands has been confirmed only on the basis of the statement of owners / transporters / drivers of the vehicle. No cross examination has been granted to the appellants manufacturers. Whereas the registered dealer has made a clear statement that he has supplied the goods to the appellants and source of procurement of the goods in question has also been stated to the investigating team but no investigation was conducted at the end of the manufacturer supplier of the i .....

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g to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assess .....

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tion of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested .....

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