TMI Blog2017 (9) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to purchase and also after purchase and the receipt in the factory of the respondent M/s ATV and only on such conformation the bank could release the amount of finance to the supplier. The entire allegation of revenue is based on flow back of money to ATV. The said allegation is misconceived in as much as admittedly the 4 cranes in questions were leased by IDBI Bank and the ownership of the same vests with IDBI bank only. There is no finding that the bank have been involved in fraud in collusion with the company M/s ATV and its Directors/Managers. Further, the allegations are vague in absence of enquiry made against M/s VEL and no collusion with intent to defraud, established by the revenue. The whole allegation of the revenue is presumptive and hypothetical. M/s IDBI Bank has collected rental, interest, compensatory finance charges, costs and differences and other dues from respondent M/s ATV under the Lease Agreement, which has not been disbelieved by the Department. The Order-in-Original is bad and rightly set aside by the learned Commissioner (Appeals) on the finding that denial of cross examination, including examination of the persons, whose statements are relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puty Manager Finance and Accounts of M/s ATV Project India Ltd. was recorded on 01/12/1998. He was asked to produce the invoices of the said goods and to clarify as to why the consignment was received in their unit on 30th April, 1996 after the period of four and half month from the date of its dispatch on 15th December, 1995. He stated that the original invoices of the said consignment were presently not available with them and the same were at their Head Office at Bombay. He stated that the reason for delay was dispute over release of payments of old dues. 4. Scrutiny of RT 12 of M/s VEL for the month of December, 1995 revealed that under the cover of their invoice numbers 97 and 98 both dated 15th December, 1995, they had cleared four cranes alongwith parts of handling equipments. Further, the addresses of the consignee namely M/s IDBI a/c ATV Projects India Ltd., Bombay was corrected as Delhi Agra Road, Mathura, (U.P.) in the invoices by using correction fluid. A close observation of these invoices, revealed that the original address on these invoices was of Bombay and also that the subject goods were financed by M/s IDBI. It was also found that the original page of RG-23C P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra from Kosi Kalan and particularly no material from M/s VEL was sent to ATV. On being shown the GR Nos.4479, 4478, 4447, 4476 and 4475, all dated 15th May, 1995, he further stated that the GRs were not issued by Syndicate Roadlines and seems to have been forged ones. He also stated that on GR No.4479, the name of the truck owner had been mentioned as Sunil in Hindi which is absurd. Statement of Shri Sunil Kumar, another partner of M/s Syndicate Roadlines was recorded on 12th March 1999, wherein he stated that he was one of the partner of M/s Syndicate Roadlines and in his knowledge no material was sent to Mathura from M/s VEL. On being shown the GRs, he stated that these GRs had not been issued by any person of Syndicate Roadlines. He did not have any truck and the GR seems to be forged one. On GR No.4479, the name of truck driver was mentioned as Giriraj. That Giriraj was the name of his father who died in 1993. He further clarified that no goods were dispatched from Syndicate Roadlines by the trucks, mentioned on the GR in question and the subject GR were forged ones as these GRs were neither in his handwriting nor it contained his signature. 6. Statement of Shri R.K. Khatr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents/entries in the statutory register were manipulated showing the purchase of the said cranes and to secure loan from IDBI without receiving the new cranes. Further, the cranes manufactured by M/s ACME Manufacturing Company, Mumbai were shown to have been manufactured by M/s VEL, and the Modvat credit amounting to ₹ 42,39,514/- was availed on the cranes already installed in the factory, way back in 1992. Thus, it appeared that ATV in active connivance with M/s VEL fraudulently availed Modvat credit on the excise duty paid on the said cranes amounting to ₹ 42,39,514/-, which were already installed as back as in the year 1992 but the Modvat was claimed in May, 1996 by showing the said cranes manufactured by M/s VEL and received by respondent M/s ATV Project India Ltd. in April, 1996. Accordingly, show cause notice dated 11/10/2000 was issued invoking the extended period of limitation, proposing to disallowance of Cenvat credit as aforementioned, alleging the same to be fraudulently taken on the 4 cranes at serial No.6, 7, 9 and 10 as mentioned in at page 2 of the SCN, with proposal to imposition of penalty and further personal penalties was proposed on Shri Mahesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants is not correct in law. Even otherwise, I notice that the finding of adjudicating authority on this point is self-contradictory. The persons having tendered the statements were declared as not directly related persons for denying the appellant s request of cross-examination, but it has not been explained by the adjudicating authority that if these persons were not directly related , then why their statements were made the basis for confirming the demand. Incidentally, this is the main inculpatory evidence against the appellants, and this very piece of evidence becomes suspect in view of breach of principle of natural justice, and hence is not reliable evidence for fastening liability on the appellants. Besides above, I also notice that the impugned order lacks proper discussion on the intimation under Rule 57-T(2) which is the primary document informing/evidencing the receipt of modvatable goods. The appellant no.-1 have submitted, through fax, the copy of intimation under Rule 57-T(2) in respect of subject goods. I have gone through the document and I find that the intimation was received in the jurisdictional Range Office of Central Excise on 01.05.96 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority. Under the principles of natural Justice, the opportunity for such cross examination is to be provided to the party. It is further stated that on going through the facts on record, particularly, the time difference in dispatch of the cranes by M/s VEL and receipt of the same by M/s ATV as well as indirect receipt of an amount of ₹ 3crores in the account of M/s ATV projects. It is evident that no crane was purchased from M/s VEL, but only paper transaction was made and documents/entries in the statutory register were manipulated showing the purchase of the said cranes by M/s ATV Project India Ltd., Mathura to avail Modvat credit of the duty paid on the said cranes and to secure loan from IDBI without receiving the new cranes. The cranes, which are actually manufactured by M/s ACME, Mumbai and were lying installed in the factory premises since 1992 were shown to have been manufactured by M/s VEL and the Modvat credit was availed on such cranes. So far the issue of cross examination is concerned the respondents never placed on record, any material evidence to contradict the statement of the persons to whose cross-examination was sought. Further, Mr. R.K. Khatri Depu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such cranes cannot be denied. 2. Further, it is also not in dispute that the four cranes in question alongwith handling equipments were leased by IDBI Bank to ATV under Master Lease Agreement dated 12.9.95, which records the name of supplier i.e. VEL (Para 9 of SCN dated 11.10.2000). Pursuant to the said agreement, IDBI made payment to VEL and VEL cleared cranes to ATV. Department neirther disputes the genuineness of the Master Lease Agreement not has conducted any enquiry from IDBI to the effect that IDBI has party to the alleged fraud. In absence of the same, it cannot be doubted that VEL cleared four cranes in question to ATV after paying duty, which were found installed at premises of ATV. Furthermore, IDBI carried our regular inspections and IDBI never objected that cranes are not installed. 3. In the alternative, even on assuming, without conceding that Cranes supplied by VEL were not manufactured by VEL but manufactured by ACME and therefore the cranes in question were second hand cranes, then also duty in respect of the same was paid by VEL at the time of clearance (not disputed by department) and therefore Modvat credit is admissible in absence of any bar under ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
