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2016 (3) TMI 665 - CESTAT NEW DELHI

2016 (3) TMI 665 - CESTAT NEW DELHI - TMI - Recovery of Cenvat credit - whether the dealers supplied goods to various persons who did not need Cenvatable invoices and supplied only Cenvatable invoices to M/s KE-I & II without supplying any goods? - Held that:- It is a fact that M/s KE-I & KE-II never admitted that they only received invoices without the goods. Not only that, they produced proper records maintained in this regard which showed receipt of the raw material for which payments were du .....

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was not permitted. If the said statements are ignored there remains hardly any evidence against M/s KE-I & II for sustaining the allegation against them. It has also been held by several judgements that 3rd party evidence cannot be made the sole basis of sustaining the demand.

When the allegations against M/s KE-I & M/s KE-II are not found sustainable, the question of penalty even on co-noticees would not arise. - Decided in favour of assessee - Appeal No. E/51508-51511/2014-EX. (SM) .....

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/- (Rs. Twenty Lakhs Eighty Eight Thousand One Hundred and Forty Four only) {Cenvat duty ₹ 20,41,101/- + E. Cess ₹ 40,843 + S&H E. Cess ₹ 6,200/-} from M/s Kisan Extrusion Ltd., Unit-I, Pithampur under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11A(1) of Central Excise Act, 1944 and the payments mentioned at Sr. No. 1, 2 & 4 of Para 46 above are ordered to be appropriated against the same. (ii) I impose a penalty of ₹ 20,88,144/- (Rs. Twenty .....

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proviso to Section 11A(1) of Central Excise Act, 1944 and the payments mentioned at Sr. No. 3 of Para 46 above are ordered to be appropriated against the same; (iv) I impose a penalty of ₹ 2,24,627/- (Rs. Two Lakhs Twenty Four Thousand Six Hundred and Twenty Seven only) upon M/s Kisan Extrusion Ltd. Unit-II, Pithampur under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944; (v) I order to recover the interest from M/s Kisan Extrusion Ltd. Unit-I, Pitha .....

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ntral Excise Rules, 2002. 2. The facts of the case are as under: The investigation conducted against some dealers of which Shri Mukesh Sangla was either proprietor or Director or authorised signatory. The statements of Shri Mukesh Sangla and others including transporters and Chartered Accountant were recorded and incriminating documents seized. Based on the evidence thus collected to the effect that; (i) The dealers supplied goods to various persons who did not need Cenvatable invoices and suppl .....

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thority held that Cenvat credit taken by M/s KE-I & KE-II on the basis of such invoices was not admissible and as a consequence passed the order above. The Commissioner (Appeals) in its order held that there is no direct evidence against M/s KE-I & KE-II regarding the non-receipt of goods in question and the entire case is based on 3rd party evidence and therefore the primary adjudication order cannot be sustained. 3. The ld. DR during hearing strenuously argued that the records obtained .....

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d) and also produced the transport documents relevant thereto. He stated that their records were consistent with the stock of material and there is no allegation that the records maintained by KE-I & KE-II were not factual. He also stated that the demand is time barred as it was raised beyond the period of one year. During the adjudicating proceeding KE-I & KE-II requested for cross examination of transporters and others whose statements were relied upon but the same was denied. 5. I hav .....

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Shri Sangla on behalf of dealers stating that only invoices were issued), I notice that their cross examination was sought by M/s KE-I & M/s KE-II. In the case of Dharampal Sataypal Ltd. Vs. CCE - 2015 (87) SCC 519 (SC), it was essentially held that (i) there may be situations where it is felt that fair hearing would make no difference-meaning that a hearing would not change the ultimate conclusion reached by the decision-maker in such situations, fair procedures appear to serve no purpose .....

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d void. (iii) The validity of the order has to be decided on the touchstone of prejudice. The Honble Supreme Court in para 40 of the said judgement observed as under : 40. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the Courts. Even if it is found by the Court that there is a violation of principles of natural justice, the Courts have held that it may not be necessary to strike down the action and refer the matter back to the aut .....

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