TMI Blog2017 (8) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2017-SM[BR] - Dated:- 21-8-2017 - Mr. Devender Singh, Member (Technical) Shri S.J. Singh and Shri R.K. Hasija, Advocates for the Appellant Shri G. M. Sharma, A.R. for the Respondent ORDER Per : Devender Singh The Appellants are in appeals against Order-in-Original No. 10-NS-ADJN-2009 dated 31.03.2009 and 15-NS-ADJN-2009 dated 28.05.2009 passed by the Commissioner of Customs, Central Excise Service Tax, Faridabad, Delhi-IV. Since all the appeals are emanating from the same investigation, they are taken up together and a common order is being passed. 2. In Appeal No. E/2554/2009 : 2.1 The appellants are engaged in manufacture of various types of Forgings for Automobile parts such as Gears, Shafts, Pitman Arm, Suspension etc. falling under Chapters 72, 82, 84 of Central Excise Tariff. Pursuant to an investigation done by DGCEI against M/s Haryana Steel Alloys Ltd. (M/s HSAL), it was revealed that M/s HSAL were clandestinely clearing SS Flats 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envat credit to various manufacturers and registered dealers without any physical receipt/delivery of goods. It was found that Sh. Ram Bilas Bansal planned to purchase cenvatable invoices without physical receipt of goods from certain manufacturers based in Sonepat and Rohtak. Statement of Sh. Ram Bilas Bansal, Prop. of M/s AVI Steel Traders, was recorded. On the basis of his statement, it was found that he was purchasing goods from M/s Haryana Steel Alloys, Sonepat, M/s Vikas Steel Alloys, Sonepat, M/s Giriraj Concast (P) Ltd, Rohtak and M/s Vishal Metal Casting (P) Ltd, Sonepat. Sh. Bansal of AVI Steel Traders was allegedly procuring clients for M/s Dev Enterprises who was issuing cenvatable invoices on M/s BSFL. Statements of the transporters and owners of the vehicles were also recorded. Financial transactions were also investigated. Statement of Sh. Ashok Bansal, Prop. of M/s Dev Enterprises, was also recorded. On the basis of his statement and statements of other persons, a show cause notice was issued. 3.3 In the adjudication proceedings, the adjudication authority vide order dated 31.03.2009, has denied the CENVAT credit ₹ 8,17,729/- and has imposed equivalent pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borated. V. The appellants always knew about the existence of M/s Dev Enterprises from their personal knowledge. VI. Statement of Sh. Ashok Bansal is not corroborated in any appeal by any other evidence. Hence not reliable. VII. The appellants had been duly accounting for all the inputs received in their unit and the goods manufactured out of the inputs. The goods manufactured by the appellants were cleared on payment of appropriate duty. There are standard norms for the input-output ratio. VIII. Out of 33 invoices, investigation has been done with respect to only two invoices credit of ₹ 67,522/- has been done. He fairly admitted that in the two invoices motorcycle and moped had been verified as vehicles. No investigation, even if done, has been brought on record, with respect to remaining 31 transactions. 5. Ld. AR appearing on behalf of the Revenue reiterated the findings of the Commissioner (Appeals) and highlighted the following evidences in support of the Revenue: (a) In relation to Appeal No. E/2554/2009 : (i) Statement of Sh. Ramesh Rawat, Executive Director of M/s HSAL. The supplier has admitted that they had diverted the goods t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also been relied. 7.2 The main argument of the Ld. Advocate is that the requirement of Section 9D of the Central Excise Act has not been followed before conclusively relying on the statement. According to him, the requirements of Section 9D are mandatory. He has relied upon the judgment of Hon ble Punjab Haryana High Court in the case of Ambika International Another Vs. Union of India and Another - 2016-TIOL-1238-HC-P H-CX. He has also advanced following other contentions: (i) The statements of persons of transport companies and/or truck owners have no evidentiary value, as they did not issue the GRs and had little knowledge about the exact use of the trucks. (ii) The absence of statements of relevant two persons of Haryana Steel who were ordering trucks and preparing GRs is a serious omission. (iii) He has also stated that the statement of Sh. Rawat is also inadmissible since he is co-accused. (iv) He has also referred to inaccuracies and contradictions in the statement of transport companies and truck owners. 7.3 I also find that Ld. A.R. has drawn attention to para 24 of the adjudication order : 24. During the course of scrutiny of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an 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 opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provision of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court. 15. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted 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. 16. Section 9D of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above, I find that the adjudicating authority has not followed the procedure laid down under Section 9D of the Act. In that circumstance, the adjudication order is liable to be set aside and the matter requires to be adjudicated afresh after following the procedure laid down under Section 9D of the Act and by following the principles of nature justice. 8. In Appeal No. E/2146-2147/2009 : 8.1 In the above appeal, the evidence is mainly in the form of the statements of Sh. Ashok Bansal, Sh. Ram Bilas Bansal, Sh. Pawan Mantri, Sh. Naresh Rawat and Sh. Ramesh Rawat. However, while relying on these statements, the mandatory requirement of Section 9D of the Act has not been followed. As pointed out in para 7.4 and para 7.5 of my findings in relation to Appeal No.E/2146-2147/2009 above, which I am relying on for this appeal as well, the procedure of Section 9D of the Act has to be followed by the adjudicating authority. For that purpose, the impugned order is also liable to be set aside except to the extent of confirmation of duty on the goods purportedly carried by two vehicles (HR 29G 7019 and HR 29G 7079), which have been to be found as motorcycle and moped a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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