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2016 (9) TMI 1051 - CESTAT ALLAHABAD

2016 (9) TMI 1051 - CESTAT ALLAHABAD - TMI - Invokation of extended period of limitation - Cenvat credit - appellant purchased input-Scrap i.e. SS Scraps from a first stage dealer namely, Khmeshwar Enterprises who was involved in passing fraudulent credit by trading in excisable goods namely Metal Scrap - seeking cross examination of witness of the Revenue - appellant contended that they are not aware, if Khameshwar Enterprises have supplied them some other scrap or non-duty paid scrap and passe .....

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having been made by the appellant. This has resulted into miscarriage of justice for not giving any reasonable opportunity of hearing. Further, in view of the findings of the Ld. Commissioner (Appeals), we find that the appellant seems to have received some scrap along with the duty paying document, also establishes the absence of collusion and or mala fide on the part of the appellant. I also take a notice of the fact that the appellant have, suo motu, reversed the Cenvat credit under dispute a .....

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016 - Dated:- 5-8-2016 - Mr. Anil Choudhary, Member (Judicial) Shri Rajesh Chibber, Advocate for the Appellant (s) Shri D.K. Deb Assistant Commissioner, (A.R.) for the Department ORDER The appellant, a manufacturer of Ingots, is in appeal against Order-in-Appeal dated 28.11.2013, by which denial of Cenvat Credit of ₹ 1,71,887/- have been confirmed along with interest and equal amount of penalty under Section 11 AC of the Act read with Rule 15 of CCR, 2004. 2. The brief facts are that the a .....

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n the premises of said M/s Khameshwar Enterprises and the residence of its proprietor Rakesh Agarwal and as per the statements recorded of the said Rakesh Agarwal, his accountant Mr. Navshad Ahmad and others, it appeared and observed as follows: I. Shri N.K. Jain (G.M Supply Chain) of M/s Jubilant Organosys Ltd have stated in his statement dated 25.01.2011 that Shri Rakesh Sharma forwarded the quotation on behalf of M/s Khameshwar Enterprises, C-111 BSR Insustrial Area Ghaziabad and quotation wa .....

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at the material was lifted by Shri Rakesh Pandit Ji from M/s Jubilant Organosys Ltd., Gajraula and Shri Rakesh Pandit provided only bill of M/s Jubilant Organosys ltd to him for further issuing the invoices of Cenvat credit to the manufacturers of excisable goods. However, Shri Rakesh Agarwal could not provide the address and contract no. of Shri Rakesh Pandit. The said Shri Agarwal also stated that Shri Rakesh Pandit sold the scrap so purchased from M/s Jubilant Organosys Ltd, Gajraula some whe .....

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se of statement of Shri Rakesh Agarwal, he was shown the details of payments of ₹ 1,38,58,410/- as prepared from their account statement. He put his dated signatures on the said statement. On being asked about the other details of payment made by them to M/s Jubilant Organosys Ltd Gjaraula from their PNB a/c No. 111600200029014 and the payments which have not been reflected in their said account was made by Shri Rakesh Pandit. However, the said Shri Agarwal in his further statement dated 0 .....

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been received by M/s Jubilant Organosys Ltd Gajraula from M/s Khmeshwar Enterprses. A chart at Annexure-A containing the details of bank drafts issued from his accounts was shown to Shri Rakesh Agarwal on 04.07.2011 and on being asked about the said difference of ₹ 92,96,175/- Shri Rakesh Agarwal in his statement dated 04.07.2011 stated that the said amount of ₹ 92,96,175/- was paid by Shri Rakesh Pandit from his account or from any other accounts which he does not know. VI. On furt .....

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and he handed over the Bank drafts to Shri Rakesh Pandit for further onward handing over the same to M/s Jubilant Organosys Ltd, Gajraula. VII. On scrutiny of the invoice books of M/s Khmeshwar Enterprises, it came to notice that they issued invoices S. No.01 dated 20.06.2007 to 29 dated 25.07.2007 from book no. 01 and thereafter they issued invoices from S. No.523 dated 25.12.2007 to 88 29.03.2008 from book no.2. Therefore, it evinces that the invoices which were left blank were meant to be us .....

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the course of search of the office premises of M/s Khameshwar Enterprises only few GRs relating to sale of goods, were recovered, as at SI. 126 & 129 of the Annexure to Panchnama dated 13.01.2011. On being asked about rest of the GRs, Shri Rakesh Agarwal stated that few G.Rs in respect of goods were issued and they did not have any other G.R. as they did not deal with the goods physically and only invoices were issued by them. IX. During the course of search on 13.01.2011, a list containing .....

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aling with the papers in relation to scrap & other materials. The above statement is corroborated from the averments made by Shri Naushad Accountant of M/s Khameshwar Enterprises in his statement dated 13.01.2011 (RUD-6) recorded on the spot, who clearly admitted to have built up papers and that they never received the goods physically in their premises. X. In question No.10 of statement dated 04.07.2011, Shri Agarwal was asked to provide the complete details of the following transporters wh .....

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arranged through brokers for Sales Tax purpose. He did not remember the broker from whom the said GRs were arranged. XI. In question No. 11 of statement dated 04.07.2011, Shri Agarwal was remembered of his statement dated 31.05.2011 wherein he assured to provide the whereabouts of the brokers. In reply, he stated that he failed to gather the information and as such could not provide to the Department. XII. In question No.12 of statement dated 04.07.2011, Shri Rakesh Agarwal was shown the stateme .....

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godown but at present he had no copy of said rent agreement or rent receipt. However, he had used the said godown upto March, 2008. From the above, it may be seen that Shri Agarwal has spoken a blatant lie, otherwise, he could have produced the rent agreement or at least a rent receipt, which point at the fact that the said godown was not in possession of Shri Rakesh Agarwal at the material point of time. The fact also goes on to prove that they were not physically deal with the materials and o .....

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ow cause as to why Cenvat Credit amounting to ₹ 1,71,887/-, be not disallowed and recovered under Rule 14 of CCR, 2004, read with Section 11A of Central Excise Act, 1944 with proposal to appropriate equal amount of Cenvat Credit already reversed vide Entry No.219 dated 20.06.2011 and further, proposal to charge interest and appropriate the amount of ₹ 73,482/- already deposited through Challan dated 20.06.2011, and further, proposal to impose penalty under Rule 15 of CCR read with Se .....

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did receive the Scrap from the seller, namely, M/s Khameshwar Enterprise. They are not aware, if Khameshwar Enterprises have supplied them some other scrap or non-duty paid scrap and passed on illegitimate credit. It was further stated that they have utilized the scrap received and maintained proper records and have manufactured dutiable finished products, which have been removed on payment of duty. It was further stated that the suo motu, reversal of duty by them with interest was not as a resu .....

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Law. That there is no case of any collusion between the appellant and the said Khameshwar Enterprises. Accordingly, under the facts and circumstances, no penalty was imposable on them. 5. The SCN was adjudicated vide Order-in-Original dated 28.11.2013 passed by the Assistant Commissioner, who was pleased to confirm the proposed demand with interest and appropriated the same with the Cenvat Credit already reversed and interest deposited. Further, penalty of ₹ 1,71,887/-, was also imposed un .....

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the statement of Rakesh Kumar Agarwal proprietor of Khameshwar Enterprises and some others. The Revenue have not made out the case that the appellant have not received the inputs under the transaction in dispute. Further, the appellant have manufactured the taxable finished goods and have cleared the same on payment of duty. Further, the deposit of duty by way of reversal along with the interest, prior to the enquiry conducted in the premises of appellant, and the statement recorded of their au .....

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e, resulting into failure of justice. Further, it is urged that the Commissioner (Appeals) has observed at Para 5.2, wherein it has been held that the grounds of the Revenue are enough to substantiate that the appellant has received non-cenvatable scrap of Iron and Steel on one hand and duty paying documents from the trading firm to regularize the receipt of scrap and availed Cenvat credit. The learned Counsel has also relied on the ruling of Hon'ble Allahabad High Court in the case of CCE V .....

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further, the goods manufactured were cleared on payment of duty, it was held that it would be impractical to require the assessee to go behind the records maintained by the first stage dealer, assessee had duly acted with all reasonable diligence in its dealing with the first stage dealer within the meaning of Rule 9(3) of CCR, 2004, casting an impossible or impractical burden on the assessee would be contrary to the Rules. Accordingly, the appeal of the Revenue was dismissed by the High Court. .....

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