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Alliance Alloys Pvt. Ltd., Aspen Online Pvt. Ltd. and Avon Tubetech Pvt. Ltd. Versus CCE, Delhi

2016 (7) TMI 153 - CESTAT CHANDIGARH

Cenvat Credit - availing credit without receipt of goods - It was also alleged in the show cause notice that the appellant had diverted the said inputs with the help of transporters and utilized the cenvat credit - Held that:- Admittedly non relied upon documents have supplied after final hearing of the case. In the circumstances, the impugned order has been passed in gross violation of principles of natural justice. - Further, the adjudicating authority has not given an opportunity of cross exa .....

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Member (Judicial) and Mr. Raju, Member (Techncal) Shri Harishankar, Advocate - for the appellant Shri B.B. Sharma, AR for the respondent ORDER The Appellants are in appeals against the impugned order. 2. The facts of the case are that the intelligence was received that the appellants, namely, M/s Alliance Alloys Pvt. Ltd. was mis-utilising the credit on the inputs, namely, virgin material, i.e. aluminium sheet/coil/C.G. Rod without receipt of the said goods. Therefore, on 20.2.2006, Central Exc .....

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s also searched and the statement of Pradeep Gupta, partner was recorded. The statements of the transporters, namely, Gurinder Pal Singh of M/s Kanpur Calcutta Goods Carrier, New Delhi, Manmeet Singh of M/s. Renukoot Goods Carrier Delhi, Ramashankar Shukla of Renukoot Goods Carrier, Jitendar Narula, owner of vehicle No. DL-IM 0928, Som Bhutani, owner of vehicle No. 1LE-8992, Kamshwar Singh, owner of vehicle No. DL-1LC-8601 were recorded. Statement of Vikshit Chadha of BALCO was also recorded by .....

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ut actual receipt of the inputs in the factory premises. It was also alleged in the show cause notice that the appellant had diverted the said inputs with the help of transporters and utilized the cenvat credit. It was also alleged that the inputs namely, CR sheet, CR coil, AI ingots an sections weighing 48,130 kgs were not found in the factory premises on which they had availed cenvat credit of ₹ 9,45,338/- on 20.2.2006. It was also alleged that Shri Rajesh Mahajan, Director of Appellant .....

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n account of fraudulent inadmissible credit alongwith interest and to impose penalty on all the appellants. The matter was adjudicated. The adjudicating authority confirmed the allegation made in the show cause notice. Consequently, confirmed the demand of duty alongwith interest and various penalties on all the appellants were also imposed. Aggrieved with the said order, the appellants are before us. 3. Learned Counsel for the appellants submitted that the entire case of the revenue is based on .....

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tted that the said statements have no credible evidence as per section 9D of the Act. To support his contention, he relied upon the decision of Hon ble Delhi High Court in the case of J.K. Cigarettes Ltd. 2009 (242) ELT 189 (Del). 4. It is further submitted that the statements of the persons recorded under section 14 of the Act, who are not examined by the revenue in adjudication, are deemed to be given up and do not constitute relevant evidence. 5. He further submitted that as per section 138 o .....

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court . 6. He also referred to the decision in the case of Shardadamma v. kenchamma, MANU/KA/8690/2006. He also relied upon the decision of Hon ble Punjab & Haryana High Court in the case of Sukhwant Singh - 1995 3 SCC 367 and the decision of Swiber offshore Construction Pvt. Ltd. -2014 (301) ELT 119 (Tri.), He further submitted that in the case of Parmarth Iron Pvt. Ltd. -2010 (260) ELT 514 (All) Hon ble High Of Allahabad has observed the same. He submitted that in the case of Bussa Overse .....

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received the inputs in their factory and availed credit on the basis of invoices only. He further submitted that once the allegedly/inculpatory statements of third parties, and the evidence sought to be proved on the basis of such statements, are eschewed from consideration, it is respectfully submitted that the case is reduced to one of no evidence, or at the worst, of evidence which is entirely insufficient to confirm the demand against the appellant. 8. Besides this, without prejudice to the .....

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al Excise Rules, 2002 as well as by circulars dated 02.02.1996, 24.5.1998 and 8.9.2006 issued by CBEC. The documents were returned to the appellant only after the last date of personal hearing in the matter. Therefore, there is gross violation of the principles of natural justice as held by this Tribunal in the case of Shipra Alloys Ltd. vs. CCE-2007 (220) ELT 297, Harika Resins Pvt. Ltd. vs. CCE- 2010 (253) ELT 108 and Saraswati Rubber Works Pvt. Ltd. vs. CCE-2006 (205) ELT 993 (Tri.) and in vi .....

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ss examination of persons whose statements were sought to be relied upon is impermissible as held by Hon ble Delhi High Court in the case of Basudev/Garg vs CC-2013 (294) ELT 353 (Del) and J.K. Cigarettes Ltd. (supra). Therefore, he prayed that the impugned order is to be set aside. 10. On the other hand, learned AR supported the impugned order and submitted that ample opportunity has been given to the appellant for personal hearing of the case but the appellant chooses not to appear and necessi .....

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impugned order on the following grounds: (a) non-relied upon documents have not been supplied before adjudication (b) no opportunity of personal hearing was given to the appellant (c) no cross examination of witnesses was allowed (d) the statements of witnesses relied upon by the adjudicating authority without following the procedure laid down under section 9 D of the Act as discussed above. 13. Admittedly non relied upon documents have supplied after final hearing of the case. In the circumstan .....

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h Court in the case of Basudev/Garg (supra) and J.K. Cigarettes Ltd. (supra) 16. We also find that the adjudicating authority has not followed the procedure laid down under section 9D of the Act. A Similar issue came up before this Tribunal in the case of Kuber Tobacco India Ltd. wherein vide Final Order No. 50938-50942/2016 dated 04.03.2016, this tribunal has observed as under : - 7. We have gone through the facts of the case wherein the certain machines were installed at Sandeep Poultry Farm K .....

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g duplicate goods bearing M/s.Kuber brand names and clearing them in the market. The facts of the care are not in dispute, the appellants have raised the dispute that the statements recorded during the course of investigation cannot be relied upon as admissible evidence in terms of the provisions of section 9D (2) of the Act. In that circumstance, it is better to extract the provisions of section 9D which are reproduced as under:- "9-D. Relevancy of statements under certain circumstances - .....

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amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of the opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceedings under this Act, other than a proce .....

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ore the Central Excise Officer of a gazette rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein. Therefore, there is no doubt about the legal position that the procedure prescribed in sub-section (1) of section 9D is required to be scrupulously followed, as much as in adjudication proceedings as in criminal proceedings relating to prosecution. Therefore, sub-section (1) of section 9D set out the ci .....

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rettes (supra) wherein hon'ble high court has observed as under:- 12. Bare reading of the above section manifests that under certain circumstances, as stipulated therein, statement made and signed by those persons before any Central Excise Officer of a gazetted rank during the course of inquiry or proceedings under this Act can be treated as relevant and taken into consideration if under the given circumstances such a person cannot be produced for cross-examination. Thus, this provision make .....

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t it was not possible to procure the attendance of some of the witnesses without undue delay or expense. Whether such a finding was otherwise justified or not can be taken up in the appeal. 9. In other words, in the absence of the circumstances specified in section 9D(1), the truth of the facts contained in any statement, recorded before a gazetted Central Excise officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, in so far as proving th .....

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the case, the statement should be admitted in evidence in the interest of justice. The same view has been taken by hon'ble Allahabad High Court in the case of Parmarth Iron Pvt.Ltd. (supra) wherein the High Court has observed as under:- 16. We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice .....

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- 9. It is not the duty of the Court to direct the parties or compel the parties as to in what manner they should conduct their case before the Court or also what quality of evidence they should place before the Court. But the duty of the court is only to appreciate the case in the proper perspective and on the basis of what is placed before the Court. Even with regard to the prayer for permitting the applicant to cross-examine the plaintiff, the prayer is misconceived as the question of cross e .....

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ection 138 of the Evidence Act. The Trial Court has rightly rejected the application. No scope for interference with an order of this nature. 11. We further find that in the case of Swiber Offshore Construction Pvt.Ltd. (supra), this Tribunal has further observed as under: 6. We therefore have no hesitation in holding that the impugned Order passed by the Commissioner as an adjudicating authority is appealable order in terms of Section 129A of the Act, even as per the ratio laid down in the abov .....

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es Ltd., 2009 (242) E.L.T. 189 (Del.) "25. Section 9D of the Act stipulates following five circumstances, already taken note of, under which statements previously recorded can be made relevant. These are:- (a) when the person who had given the statement is dead; (b) when he cannot be found; (c) when he is incapable of giving evidence; (d) when he is kept out of the way by the adverse party; and (e) when his presence cannot be obtained without an amount of delay or expense, which the Officer .....

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s also relied on the judgment of Hon'ble Apex Court in Sukhwant Singh v. State of Punjab, (1995) 3 SCC 367 to give emphasis on his submission that examination of witness is mandatory unless specified exceptional circumstances mentioned in clause (a) of Section 138B(1) exist. The Hon'ble Apex Court was pleased to hold that - "8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides: "138. Order of examinations. - Witnesses shall be first e .....

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ntroduced in re-examination, the adverse party may further cross-examine upon that matter." 10. We therefore find force in the submission of the ld. counsel for the appellant. We find no reason to justify rejection of request made by the appellant to the adjudicating authority in light of Section 138B of the Act, to summon witnesses for examination and to offer them for cross-examination if their statements were to be considered as relevant and admitted in evidence in the interest of justic .....

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. 13. We further find that Hon'ble Punjab & Haryana High Court in the case of Sukhwant Singh it has been observed as under:- 8. It will be pertinent at this stage to refer to section 138 of the Evidence Act which provides: "138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross- examined, then (if the party calling him so desires) re-examined. The examination and cross-examination must relate to relevant facts but the cr .....

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and then subjected to cross-examination and for seeking any clarification, the witness may be re-examined by prosecution. There is, in our opinion, no meaning in tendering a witness for cross-examination only. Tendering of a witness for cross-examination, as a matter of fact, amounts to giving up of the witness by prosecution as it does not choose to examine him in chief. However, the practice of tendering witness for cross-examination in session trials had been frequently resorted to since the .....

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