TMI Blog2017 (10) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no allegation that the payments made by account payee cheques to the suppliers have been received back by the respondent. Appeal dismissed - decided against Revenue. - E/558, 559 & 560/2009-EX[SM] - A/71119-71121/2017 - Dated:- 24-3-2017 - Mr. Anil Choudhary, Member (Judicial) Shri Rajeev Ranjan, Joint Commissioner, (AR), for Appellant Shri Amit Awasthi, Advocate, (In Appeal No.E/558 559/2009), for Respondent Per: Anil Choudhary The Revenue is in appeal against common Order-in-Appeal No.02-03 04/CE/APPL/KNP/2009 dated 13/01/2009 passed by Commissioner of Central Excise Customs (Appeals), Kanpur whereby the ld. Commissioner was pleased to hold that demand is liable to be set aside and accordingly the same is set aside. Regarding the demand of ₹ 19,177/- on alleged shortage of inputs towards disallowance of Cenvat credit, the same had been upheld, observing that the shortage worked out is doubtful, as the stock taking was by way of eye estimation, but the demand was upheld, in view of the admission of the Director. As regards the, demand of ₹ 11,953/- on alleged clandestine removal of finished goods manufactured out of short foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , another trader, some documents were found which were resumed. Search conducted at official premises of the Respondent No.1 in presence of Shri Y. K. Tripathi, Accountant, some documents were found which were resumed. Scrutiny of documents resumed showed that the Respondent No.1 had taken Cenvat Credit on inputs such as Channel, Joist, Angle, Round, Bar, Bar, H.R. Strips, Shape Sections etc. which were to be produced from Ingots etc. which were the final products of the Respondent No.1. Enquiries made revealed that all directions for purchase of raw materials were given by the Respondent No. 2 (Gaurav Sharma Director). The Respondent No. 2 in his statement dated 20/04/2004 deposed that Scrap, Sponge Iron, Pig Iron etc. were the raw materials required for production of Ingots and major suppliers were M/s Mannat Ispat, Jindal Steel, Nova Ispat, Vikram Ispat, Ispat Industries exclusively for Sponge Iron and M/s Bhawna Steels, M. B. Industries, M.P. Traders etc. were for scrap only. He further stated that purchase orders for raw materials were placed telephonically and mainly raw materials used to be transported from suppliers of Ghaziabad by transport arranged by them. In the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued to all the respondents which were adjudicated vide Order-in-Original No.02/ADC/2007 dated 31/01/2007 under which Cenvat Credit amounting to ₹ 38,55,429/- was demanded as wrongly availed in addition to demand of ₹ 19,177/- ₹ 11,953/-, alongwith interest. An equivalent penalty of ₹ 38,86,559/- was imposed on Respondent No.1 under Section 11AC of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002. Penalties of ₹ 4,50,000/- and ₹ 50,000/- were also imposed upon Respondent No.2 and upon Respondent No.3 (not upon Shri Rajeev Agarwal, Manager) as mentioned in impugned order, respectively. Being aggrieved appeals were filed before Commissioner (Appeals), Central Excise, Kanpur which were disposed off by means of Order-in-Appeal No.229-231-CE/APPL/KNP/2007 dated 28/06/2007 under which the said Order-in-Original was set aside and case was remanded back to the Adjudicating Authority for passing a fresh order granting cross examination sought by the respondents and after awarding reasonable opportunity of personal hearing to them. The case was re-adjudicated vide Order-in-Original dated 12/11/2008 under which demand of ₹ 38, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly availed on raw material/inputs allegedly not received, is not sustainable in law. The ld. Commissioner (Appeals) have rightly confirmed the demand of ₹ 19,177/- on raw material/inputs found short on physical verification, but have erred in setting aside the demand of ₹ 38,55,429/-. It is further urged in the Revenue appeal that the Adjudicating Authority took steps for attendance of the persons for cross examination, who had made the contradictory statements, but these persons in question, did not attend cross-examination on the scheduled dates. Therefore, it cannot be held that merely because of the failure of the persons concerned, to appear for cross examination, on the scheduled dates, their second statements alleging that no raw material/inputs were supplied to Respondent No.1, were incorrect. The evidentiary value of the second statements cannot be brushed aside, simply because they did not appear for cross-examination, particularly when it has merely been alleged but not conclusively proved that the second statement of these persons were recorded under duress. Therefore, setting aside of demand of ₹ 38,67,382/- by Commissioner (Appeals) is not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd none appeared on the said date 10/04/2008. Then another date was fixed on 13/05/2008, for the above said persons to appear. On the said date two persons namely; Shri H. A. Khan, Superintendent (Preventive) Shri N. K. Das, Superintendent, appeared for cross-examination. Shri Amit Awasthi, Counsel for the party/respondents had put questions to the said witnesses and thus cross examined them. It is explained by the ld. Counsel for the respondent that these are the formal witnesses who prima facie supported the relied upon documents, the fact of recording of statement etc. in the search/investigation proceedings. The Counsel for the respondents reiterated the request for cross-examination of Shri Lalit Kumar Sharma, Shri Vijay Sahni Shri G. K. Bansal. Another date of hearing in the matter was fixed on 25/06/2008 and in this regard, summons were issued to them and none of the persons came to attend the cross-examination on the scheduled date. On further request by the counsel for the respondent, date of hearing be fixed on 20/07/2008 to cross-examine also one, Shri Shashi Shekhar, SIO, DGCEI, Kanpur, the main Investigating Officer in the proceedings. The next date fixed on 29/08/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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