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TMI Blog2017 (8) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... to certain manufacturers in Delhi and Jodhpur and to cover such clandestine clearances, they were issuing Cenvatable invoices to some of the manufacturers located in Chandigarh, Faridabad and Rohtak showing clearance of A.S. & M.S. Ingot/Bars of Rods and Ferro Alloys without dispatching any goods to them so that such recipients could avail Cenvat Credit on the invoices without receiving the corresponding goods. 2.2 As per intelligence, M/s Blue Stampings & Forgings Ltd. (M/s BSFL) was one such company. Investigation was therefore launched and details of consignments dispatched from M/s HSAL to M/s BSFL were prepared. Neither M/s HSAL nor M/s BSFL could produce any documents showing transportation of the said goods. M/s BSFL were repeatedly asked to produce the GRs and other transport documents showing the actual transportation of the consignments of Alloys Billets & Bars and Rods from M/s HSAL. Despite various opportunities provided to M/s BSFL, they did not submit the transport documents. The statements of owners and partners of the transporter companies and some truck owners were recorded, who stated that they had transported the goods loaded from the factory of M/s HSAL only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued. 3.3 In the adjudication proceedings, the adjudication authority vide order dated 31.03.2009, has denied the CENVAT credit Rs. 8,17,729/- and has imposed equivalent penalty on appellant No.1 besides imposing a penalty of Rs. 1,16,000/- on Sh. Pawan Mantri on the ground that no inputs have been received against the invoices on which credit has been taken. Aggrieved from the same, the appeals have been filed by the appellants M/s BSFL and Sh. Pawan Mantri. 4. Ld. Advocate appearing for the appellants made the following submissions: (a) In relation to Appeal No. E/2554/2009 : (i) The whole case of the revenue is based on the statements of certain persons of M/s HSAL and transportation agencies. There is little corroboration of these statements in general. (ii) The mandatory requirements of Section 9D of the Central Excise Act, have not been followed before conclusively relying on the statements. The omission to follow the mandatory requirements of Section 9D is fatal to the adjudicating proceedings. Reliance in this regard was placed on the following decision of Hon'ble Punjab and Haryana High Court:- Ambika International & Another vs. Union of India and Another - 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Executive Director of M/s HSAL. The supplier has admitted that they had diverted the goods to Rajasthan and have given only invoices to the appellants. (Para 24 of the impugned order). (ii) Investigations conducted at the end of Transporters. Statements of the transporters were conducted who have denied having transported the goods to appellants premises. (paras 13 to 20 of the impugned order). (iii) Diversion of goods to Jodhpur. (paras 21 to 24) Invoices no. 475 & 478 both dated 20.07.2005 were issued by M/s HSAL to appellants and truck nos. HR 38 D 3030, HR 55 A 3684 were mentioned therein. Same trucks were shown to have transported goods, on same day, of HSAL to parties of Jodhpur, as per records resumed. On investigation the Directors of HSAL have admitted issuing only invoices to the appellants. (iv) Voluntary deposit. The appellants deposited the Cenvat credit during investigation. (b) In relation to Appeal No. E/2146-2147/2009 : (i) Statement of Sh. Ashok Bansal, Prop. of M/s Dev Enterprises (Para 97 of the impugned order), wherein he has admitted of having issued invoices only, without supply of the goods to appellants. (ii) Supplier has explained the settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rutiny of records of M/s Manak Overseas Ltd, Jodhpur and M/s Rishab Trading Company, Jodhpur, it has been observed that SS Flats were received by them on the bills/invoices issued by M/s Vigyan Udyog Corporation on 20.7.2005 transferred in vehicle numbers HR 38D 3030 and HR 55A 3684 (RUD - 15 & 16). On the same dates M/s HSAL had issued invoices to M/s BSFL for the dispatch of Alloy Steel Bars & Rods and transported through two vehicles. Therefore, the said trucks could not have been carried the goods shown to have been transported under the said invoices issued by M/s HSAL to M/s BSFL." I find that Ld. Adjudicating Authority has given no clear finding on the above evidence. Hence, it needs to be examined afresh by the Adjudicating Authority. 7.4 I find that the contention of the Ld. Advocate that the adjudicating authority did not follow the requirements of Section 9D of the Central Excise Act, 1944 is correct. I also find that the adjudicating authority has not referred to the exceptions mentioned in Section 9D while relying on the statements of Sh. Ramesh Rawat (ED of M/s HSAL), Sh.Pawan Mantri and Sh. Jaspal Singh (Partners of M/s Delhi-Kolkata Carrier), Sh. K.C. Sharma, Sh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and examination, by the Delhi High Court, in J.K. Cigarettes Ltd. Vs. CCE, 2009 (242) ELT 189 (Del) = 2009-TIOL-478-HC-DEL-CX. Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well. There can, therefore, be 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 in adjudication proceedings as in criminal proceedings relating to prosecution. 17. As already noticed herein above, sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants. It is evident that goods could not have been received by appellant in the vehicles mentioned in the invoices. In this regard, reliance is placed on the judgment of Hon'ble Punjab & Haryana High Court in the case of Ranjeev Alloys Vs. CCE, Chandigarh - 2009 (247) ELT 27 (P&H). Accordingly, the demand in respect of invoices pertaining to those two vehicles is upheld along with interest and equivalent penalty thereon. However, the same will be re-quantified by the adjudicating authority. 8.2 In view of the foregoing, the impugned order (except in relation to two vehicles mentioned in para 8.1) is liable to be set aside and the matter is remanded back to the adjudicating authority to re-adjudicate the matter after following the procedure laid down under Section 9D of the Act and by following the principles of nature justice. 9. In the result, (i) in appeal no.E/2554/2009, the matter is remanded back to the adjudicating authority for fresh adjudication by following provisions of Section 9D of Central Excise Act, 1944. (ii) in appeal no.E/2146-2147/2009, (a) the demand in relation to invoices pertaining to vehicles No. HR 29G 7019 and HR 29G 7079 is upheld. The mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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