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2016 (6) TMI 912

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..... n favor of assessee. - Appeal No. E/689 & 690/ 2012-SM & E/774/2012-SM - A/30267-30269/2016 - Dated:- 1-4-2016 - Ms. Sulekha Beevi, C.S. Member(Judicial) Shri P.Dwarakanath and Shri B.Venugopal, Advocates for the Appellants Shri M.K.Mall, Shri S.Dora Reddy Shri V.J.Manvatkar, AR for the Respondent ORDER [ Order per Sulekha Beevi, C.S. ] 1. The above appeals emanate from the same Order-in-Appeal. Hence they are disposed by this common order. 2. The appeal No.E/774/2012 is filed by M/s Karnataka Metal Company (KMC). The appeals No.E/689-690/2012 is filed by M/s Adhikasri Electromech Pvt.ltd.(AEPL) and its Managing Director Suresh Tibrewala respectively. M/s AEPL are engaged in the manufacture of electrical fans and are registered with the central excise department. They are also availing the facility of Cenvat credit on inputs. It is the case of the department that on specific intelligence that AEPL was indulging in fraudulent availment of Cenvat credit on invoices obtained from a registered dealer, without actual receipt of goods investigation was conducted. On scrutiny of input invoices for the period February, 2003 to March, 2007, it was revealed tha .....

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..... MC. 4. A show cause notice was issued raising the above allegations that AEPL availed Cenvat credit fraudulently using the invoices issued by KMC without actual receipt of goods. The notice inter-alia proposed to demand ₹ 8,20,779/- being the credit availed during the period 2/2003 to 11/2006. It also proposed to demand interest and to impose penalty on all appellants. Besides this, the notice proposed confiscation of goods mentioned in the invoices and also confiscation of finished goods cleared by paying the duty using the alleged credit. After adjudication, the Order-in-Original dated 29-09-2009 was passed confirming the demand of credit of ₹ 8,20,779/- and confiscation of goods as per the invoices on which credit was availed and imposed equal amount of penalty as the goods are not available for confiscation. The finished goods cleared at value of ₹ 50,81,200/- was confiscated and in lieu of this penalty of ₹ 1,00,000/- was imposed under Rule 25 of Central Excise Rules, 2002. A penalty of ₹ 1,00,000/- was imposed on M/s KMC under Rule 25 of Central Excise Rules, 2002 and Rule 13 14 of Cenvat Credit Rules, 2002/2004. Separate penalty of ₹ .....

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..... k drivers were also not examined. Further, that Shri Prabhakar has made contradictory and inconsistent statements which cannot be relied at all. No evidence is adduced to show how the private records are related to KMC. 7. The learned counsel then drew attention to the Order-in-Original dated 30-10-2009 passed by the same adjudicating authority in the case of M/s Kedia Electrical Ltd. who were also issued show cause notice pursuant to search conducted in the residential premises of Shri Prabhakar and investigation conducted thereon. The allegation was that M/s Kedia availed fraudulent credit on invoices issued by KMC without actual receipt of goods. The very same officer after scrutinizing the evidence, has dropped the proceedings initiated against M/s Kedia Electrical Ltd. Further this Tribunal vide Final Order No.A/30028-30029/2016 dated 20-01-2016 has set aside demand raised on similar allegation against M/s Sri Lakshmi Industries, to whom show cause notice was issued pursuant to search at the residence of Shri Prabhakar. Again, the Commissioner (Appeals) vide order dated 04-12-2009 in Order in-Appeal dated No.99/2009 has set aside the demand raised against M/s Khaitan Electr .....

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..... been set aside is material for consideration. The penalty imposed against KMC in which, KMC was a co-noticee, has also been set aside. In all these cases, the statement of Shri Prabhakar and the private records resumed form his residence has undergone detailed analysis. This Tribunal in the case of Sri Lakshmi Industries Ltd also had considered these evidences. In the case on hand, a single entry shown against Adhikasri in the note book tallies with figures in one invoice dated 05-04-2003 which was an invoice issued by KMC. There is no dispute that KMC was a supplier of raw material to AEPL. One important question that remains unexplained by department is that, if such huge quantity of raw material was not supplied to AEPL and only invoices were issued is to be believed, then how AEPL was able to manufacture finished products to the value of ₹ 50,18,200/- (as stated in Show cause notice) during the relevant period. Though the learned AR contends that AEPL procured the inputs form local market there is no iota of evidence to establish this. Further none of the drivers or transporters have been examined. The analysation of evidence in the decisions of connected cases is notewor .....

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..... lied fully, when he is not a party to the notice and as per his own admission, has been actively engaged in issuing inputs under kacha bills to unidentified manufacturers in and around Hyderabad 12. In Order-in-Appeal No.26, 27, 28/2010, dated 26-02-2010 in the appeals filed by M/s Prism Airtech KMC, the Commissioner (Appeals) observed as under: The burden is on the investigation to prove that the appellants have merely received Cenvatable invoices without the accompanying materials. As rightly contended by the Appellants, had there been any non/short receipts, then it would have got reflected in their inventory and there would be negative balances at the end of the financial year, which however is not the case. Hence, I find adequate force in the contention of the appellants in as much as it is not the case of investigation that there was any shortage of physical stocks vis-a-vis the recorded book stock at the time of search. As regards, the reliance placed on various statements by the investigation to sustain the charges, I am to observe that mere statements are not enough to confirm the allegations as held by various judicial fora in several cases. In the absence of corro .....

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