TMI Blog2016 (10) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... n proceedings and to further offer the witnesses for cross-examination, which is in clear violation of provisions of Section 9D of the Central Excise Act, thus, vitiating the impugned order. The allegations of family concern on the appellant (company) viz-a-viz Rathi Ispat Ltd., is vague and no averment supporting the same have been made either in the SCN nor any findings recorded in the Order-in-Original. Under the facts and circumstances, there being no suppression of facts and/or contumacy conduct on the part of the appellant, the extended of limitation is not invokable, on this score also, the tax and penalty are fit to be set aside. The appellant entitled to take back the Cenvat Credit debited in their register by way of pre deposit during the pendency of this appeal with interest, as per Rules - appeal allowed - decided in favor of appellant. - Appeal No-E/1648/2011-EX [DB] - ORDER NO. 30739/2016 - Dated:- 29-6-2016 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. ANIL G. SHAKKARWAR, MEMBER (TECHNICAL) Shri Udit Chandra Shri Subodh Kumar, Advocates for the Appellant (s) Shri S.J. Sahu Asstt. Commissioner, (A.R.) for the Department ORDER Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and clearance of both alloy and non-alloy steel products were duly reflected in the RT - 12 returns which are accepted by the Department after due verification. The appellant purchased its inputs namely billets, Ingots and SS. Flats etc. on payment of duty from manufacturer like Tata Steel, Rathi Ispat, Ram Ganga Cement Pvt. Ltd., Shri Om Metals Ltd., etc., and availed credit of duty paid on such raw materials, on receipt of such materials in the unit along with the invoices. On receipt of the raw materials, they are weighed on the appellants own weigh bridge inside the factory premises and detailed weighment slip containing the full details of the goods received is prepared. Thereafter, entries were made in RG-23A and form-IV register. The appellant also has a trading division in the name and style of Rathi Steel Rolling Mills ( a Unit of Rathi Industries Ltd, Bulandshahar Road, Ghaziabad) which is engaged exclusively in trading. The appellant maintains separate accounts for their trading division. 3. The revenue on the basis of intelligence that another company namely Rathi Ispat Ltd., a manufacturer of Iron and steel products have indulged in suppression of production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed in the RT-12 returns the details of consumption of SS Flats and M.S. billets physically received from Rathi Ispat Ltd, and others, in production of taxable finished goods. 5. That another show cause notice dated 13.08.2002 was issued alleging that the appellant had availed credit on MS billets/lngots, SS Flats on the basis of invoices in respect of these goods without receiving the same from Ratht Ispat Ltd, It was further alleged that Rathi Ispat Ltd. do not manufacture MS billets/lngots and the appellant do not have the facility for further rolling of SS Flats into SS Rods. It is also alleged that the appellant has shown clearance of SS Flats in the shape of S.S. Rods in order to improve their turnover. Accordingly it was proposed to disallow Cenvat credit amounting to ₹ 2,45,49,032/- for the period of May 2000 to December 2000 availed by the appellant on S.S. flats, MS billets and Ingots, and utilised for payment of duty in terms of Rule 57 AH (2) of CERI 1944 read with section 11 A of the Central Excise Act, Further penalty was proposed under rule 57 AH and rule 173 Q(1) along with proposal to confiscate plant, building, machinery etc. 6. The appellant conteste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause notice are vague and unsubstantiated. The allegation in the notice that the appellant did not have facility for the rolling of stainless steel products is also vague and bad, Further, the statement of the employees of Rathi Ispat Ltd., namely Shri Haridwar Rai and Vinod Sharma are contrary to the documentary evidence available, The Cenvat credit of ₹ 36,61,459/allegedly availed on SS Flats is bad as the same were purchased by the trading division and in respect of which no Cenvat credit, whatsoever, was availed by the appellant manufacturer. The revenue have at no stage disbelieved the returns filed periodically, which disclosed manufacture of stainless steel rolled products. The SCN also proposes to deny credit of ₹ 34,68,749/- availed as credit in respect of 115 invoices issued by Rathi Ispat Ltd. in respect of purchase of MS billets. Relying on the statement of the said two employees of R.l. Ltd., stating that they did not manufacture MS billets/lngots is bad and vague and fit to be dropped. There is no dispute by the revenue as regard the duty paid by the supplier in respect of the inputs received by the appellant. Further, there is no dispute by revenue on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts and tools manufactured from SS flats. Further these facts have also been supported in the statement of Shri Prashant Dayal, their In-charge of production, recorded by the revenue under section 14 of the Act. Further, it is an admitted fact that Rathi Ispat Ltd.(supplier) were manufacturing S. S. flats which is also supported from their documents as well as statement of their employees. So far the reliance has been placed on the statement of one Pramod Sachdeva transporter and his truck movement register based on which it has been alleged that the appellants did not receive the S.S. flats in their premises. Infact, the appellant have received 4561.10 MT of SS flats from Rathi Ispat Ltd. The revenue has not been able to lead any evidence to show that the appellant have received the SS flats from any other source. Further, the appellant have maintained proper records of the transactions which have not been found untrue. Moreover, payments have been made to Rathi Ispat through banking Channel. The purchase and utilisation of other inputs being alloys, ferro manganese, ferro silica etc. also support the manufacture of SS account of the transporter M/s appellant clearly evidences t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in the said department. The Revenue Officers did not make any enquiry from them and have drawn the presumption that M.S. Billets and SS Billets/Flats were not received by the appellant (Company). The debit entry made of ₹ 25 lakhs in the Cevat Register on the date of inspection and further, undertaking by him deposit ₹ 13,02,298/- within a week, on account of the allegation of non-receipt of M.S. Billets from Rathi Ispat, does not lead to any adverse interference, as the appellant soon thereafter, protested the behaviour of the inspecting officials bringing same to the knowledge of the jurisdictional Commissioner, wherein it was informed that the debit in Cenvat Register were made as the inspecting officials exercised undue influence and/or prevailed on Mr. Singhal. Further, permission was sought to re-credit the amount debited. The appellant was finally permitted to take the re-credit pursuant to the order passed in Writ Petition by the Hon'ble High Court of Allahabad. 7.5 So far, the statement of Pramod Sachdeva-Transporter and Proprietor of Sachdeva Carriers is concerned, he has said in his statement that he is not maintaining any records in respect of move ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned persons and others cannot be relied upon by the Revenue against the appellants as the appellant had categorically requested for cross-examination of all these persons, whose statements have been relied upon by Revenue in the SCN. By not providing such opportunity, there have been miscarriage of justice. Thereby, vitiating the impugned order. On the issue of cross-examination, the Ld. Commissioner have not given any cogent reason for denying the same, except observing in para 6.4 of his order that cross-examination was permitted, but inspite of repeated letters non of witnesses appeared for the same. It is further observed that the demand of cross-examination of some of the persons, without giving any names, whose statements have been relied, has not been found to be proper, in view of the fact that apart from the statement of Pramod Sachdeva, all others were employees of either the appellant(company) or the supplier Company, namely Rathi Ispat Ltd. (co-noticee). Thus, it is evident that the Ld. Commissioner failed to exercise the jurisdiction and power vested in him in producing the witness of Revenue for cross-examination without any cogent reason and as such, the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . and M/s Asvad Steel Alloys (P) Ltd., who have admitted receipt of ineligible Cenvat Credit from the said Rathi Ispat Ltd. Thus, Revenue is justified in concluding, this appellant have also received ineligible Cenvat Credit. He further states that during the relevant time, although appellant have disclosed clearance of finished goods in their records and in the RT-12 returns, such returns were not being assessed by the Revenue and were subject to calculationchecking only. During the said period, the self assessment system was invoke. 9. Having carefully considered the rival contentions, we find that the show cause notice is vague and unsubstantiated. The show cause notice have nowhere disclosed the source of several invoices (about 620 in number) purported to have been issued by Rathi Ispat Ltd, for sale of materials to the appellant on the basis of which the transporter-Pramod Sachdeva was confronted. Further, the said invoices are not part of the relied upon documents in the show cause notice. As such, the appellant also did not have any opportunity to comment on those invoices, as admittedly the copy of such invoices was never made available to the appellants. We further f ..... 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