TMI Blog2016 (10) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... by the adjudicating authority during the course of adjudication. The adjudicating authority has only relied on the statement that the appellant has not received HR/CR coils. It is admitted position that the appellant has not received HR/CR coil in the factory and the same has been sent to the job worker directly for cutting/slitting. These facts have not been considered by the adjudicating authority. It is also found that there is statement of supplier of coil that they have supplied these coils to the appellant but no statement of the transporter has been recorded to find out the truth. In the absence of such positive evidence, the evidence produced by the appellants are having evidentiary value - Therefore, the credit on HR/CR coil cannot be denied to the appellants. The demand on account of goods received and cleared without cover of invoices - parts cleared on payment of duty but later these parts have come back for repairs and further they have been cleared without payment of duty as the second time duty is not required to be paid - Held that: - in the absence of any documentary evidence in support of the appellant's contention, the defence taken by the appellant is not adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it at Ludhiana, there was shortage of 82.235 MT of HR/CR sheets as compared to the stock shown in the statutory record and cenvat credit involved on this quantity was3,62,447/-. This shortage was admitted and cenvat credit was reversed on that day itself. The officers also seized certain records including two pocket diaries from the drawer of Sh. Surinder Singh, Security Supervisor at Ludhiana unit. The diary recovered from She Surinder Singh contained date wise details of the receipt of raw materials HR/CR sheets and also details of clearance/sale of the finished goods and scrap. Although both the units of M/s SAIPL were showing the receipt of HR/CR coils, in none of the units any facility for cutting/sitting of the CR/HR coils was found. Statement of Sh. Surinder Singh was recorded on 19.05.06 wherein he said that the two diaries recovered from his drawer had been written by him; that the same contained the details regarding the receipt of HR/CR sheets and also the dispatch of scrap as well as some finished goods. Though Sh. Surinder Singh retracted his statement on 21.05.06, he was summoned by investigation officer again on 24.05.06 and at that time he withdrew his retraction an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the store keeper and Sh. Bir Singh yadav, works Manager of the unit, it was found that only the HR/CR sheets had been received, not coils, as there was no facility for slitting of the coils in the factory. On enquiry with M/s Golden Steel Co. as well as M/s Rajeev Steel, the proprietors of these suppliers disclosed that they have sold only CR/HR sheets/ Strips to M/s SAIPL, Gurgaon though the invoice had been issued for coils and that they are not in a position to produce any bilties/GRs for transportation of the goods supplied by them 1.5 Statement of Sh. Ravi Sharda was also recorded on 20.05.2006 wherein he was asked about the entries in the diaries recovered from the drawer of Sh. Surinder Singh and he accepted that the details of the raw-materials received, as mentioned in the diaries are not reflected in the statutory records. 1.6 On the basis of the above investigation, a show cause notice dated 23.10.2007 was issued to M/s SAIPL, Ludhiana and Gurgaon, Shri Ravi Shards, M.D. of M/s SAIPL, M/s Krishna Agro, Ludhiana, M/s Allied Agro, Ludhiana, M/s Golden Steel Co., Faridabad, M/s Rajeev Steel, Faridabad and M/s Allied Steel, Ludhiana-for (a) Recovery of Cenvat Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 15.05.2009 by which- (i) Cenvat Credit demand of ₹ 50,23,955/- was confirmed alongwith interest against M/s SAIPL, Ludhiana and Cenvat Credit demand of ₹ 17,60,447/- alongwith interest was confirmed against M/s SAIPL, Gurgaon and amounts of ₹ 37,74,000/-. and ₹ 7,00,000/- already reversed/paid towards these demands were ordered to be appropriated; (ii) Central Excise Duty demands of ₹ 32,61,960/-3,62,447/- and ₹ 13,513/- were confirmed against M/s SAIPL, Ludhiana along with interest and total amount of ₹ 3,76,175/-(3,62,477+13,698) already paid towards these demands was ordered to be appropriated; (iii) Penalty of ₹ 1,04,22,322/- was imposed on M/s SAIPL under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 44 and penalty of Rs- 2 lacs was imposed on Ravi Sharda, M.D. under Rule 26 of Central Excise Rules, 2002; (iv) Penalty of ₹ 2 Lacs each was imposed under Rule 25 of Central Excise Rules, 2002 on M/s Krishna Agro, M/s Allied Agro and M/s Allied Steel; and (v) Penalty of Rs. One Lakh each was imposed on M/s Golden Steel Coo and Rajeev Steel, Faridabad under Rule 25 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is taken to be correct then there should be production of 2370.951 MT of scrap be produced in the factory of the appellant to manufacture of such scrap, there should be such quantity of raw material and finished goods to be manufactured during the period the same is considered then the allegation is proved wrongly. He further submits that in the ideal situation is taken then the maximum scrap can be generated only 1612.058 MT. To support this appellant has submitted various charts and diagram and certificate of chartered engineer has produced 5911.54 MT as raw material/inputs and cleared 4299.49 of finished goods. Therefore, the maximum waste can be generated to the tune 1612.058 whereas the appellant has recorded waste of 1577.708 in the RG-1 register out of 1560.095 MT has been cleared on payment of duty. This fact has not been disputed by the Revenue. The demand confirmed simply on the basis of statement of Shri Surinder Singh, security supervisor who has noted in the slip pad. The revenue has also relied on the statement of Shri Amarjit Singh Bajaj and during cross examination of Shri Amarjit Singh Bajaj, stated that he has never purchased the scrap from the appellant and he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diaries of the security supervisor and also confirmed by Shri Amajit Singh Bajaj (a major buyer of scrap). He submits that the material received was HR/CR sheets from various suppliers without any bill and for availing the credit on the invoices procured form M/s.Allied Agro, Allied Steel and Krishna Agron It is admitted were not having the facility to cut HR/CR coils/sheets at their unit Ludhiana/Gurgaon obviously it is not using HR/CR coil into their factory. It is proved that the appellant were not using the goods described in the invoices, therefore, the appellant is not entitled to avail the credit on these invoices. 8. Heard the parties and consideration the submission. 9. On careful consideration of the submissions made by both sides, we find that three issues emerge which are as under: (i) The demand on account of clandestine clearance of scrap by the appellant (ii) Availability of credit on the allegation that only invoices have been received and no such invoices have been received (iii) the demand on account of goods received and cleared without cover of invoices Issue No.1 10. To deal with the issue of clandestine clearance of the scrap based on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute and out of this in 6 invoices the description shown as CR sheets and in 40 invoices the description is HR coils slitted and 34 invoices, the description shown as HR coiln. It is evident from the list only against invoices 34 invoices, the appellant has received HR/CR coils. With regard to these, the appellant has taken the defence that these HR/CR coil has been sent to job work for cutting/slitting. The job charges have been paid and the goods have been received from the job worker against job work challan. These evidences had not been given credence by the adjudicating authority during the course of adjudication. The adjudicating authority has only relied on the statement that the appellant has not received HR/CR coiln. It is admitted position that the appellant has not received HR/CR coil in the factory and the same has been sent to the job worker directly for cutting/slitting. These facts have not been considered by the adjudicating authority. We also find that there is statement of supplier of coil that they have supplied these coils to the appellant but no statement of the transporter has been recorded to find out the truth. In the absence of such positive evidence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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