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M/s. Gontermmann Peipers (India) Ltd., Shri Lalit Kr. Poddar Versus Commissioner of Central Excise, Kolkata

2017 (11) TMI 769 - CESTAT KOLKATA

CENVAT credit - Revenue's main case is based upon the statement of Shri S.K.Gupta, Proprietor of M/s. M.K.Steels. Admittedly, the said Shri Gupta was not presented for cross-examination or for examination in chief by the Commissioner - cross-examination - Held that: - The Tribunal in the case of Commr. Vs. Kuber Tobacco India Ltd. [2016 (4) TMI 622 - CESTAT NEW DELHI] held that Adjudicating Authority is first required to examine the deponent of the statement and there after cross-examination is .....

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de no efforts to establish that the cheque payments made to M/s. M.K.Steels as consideration for the bought out inputs were received back by the appellants in cash. I also note that Shri S.K.Gupta apart from making bald statement that the amounts were returned to the assessee through broker, who was given 1% commission has given no further details. There is nothing on record to establish the said transactions. - Appeal allowed - decided in favor of appellant. - Appeal Nos. E/25/2010 & E/26/2 .....

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from one M/s. M.K.Steels which is a registered dealer. Such procurement was on the basis of the invoices issued by said dealer wherein the particulars were reflected. On the basis of the same the appellant availed cenvat credit of duty paid on the said inputs, as shown in the invoices. 3. As a result of some circular issued by the Commissioner of Central Excise, Kolkata investigation was conducted at the end of M/s. M.K.Steels. The statement of Shri S.K.Gupta, Proprietor of M/s. M.K.Steels was .....

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Officers revealed that the particulars given by M/s. M.K.Steels in their invoices do not match with the invoices of M/s. Durgapur Steel Plant. However, it is seen that no data was provided by the M/s. Durgapur Steel Plant. Revenue also found that the vehicle particulars in some cases as mentioned in the invoices of M/s. M.K.Steels were that of Taxi or Tractor or light goods vehicles incapable of transferring the goods in question. 4. During the course of further investigation, Revenue approache .....

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n of penalties on both the appellants. Hence, the present appeals. 6. After hearing both sides I find that the Revenue s main case is based upon the statement of Shri S.K.Gupta, Proprietor of M/s. M.K.Steels. Admittedly, the said Shri Gupta was not presented for cross-examination or for examination in chief by the Commissioner. The Tribunal in the case of Commr. Vs. Kuber Tobacco India Ltd. [2016(338) E.L.T. 113 (Trib.Del.) held that Adjudicating Authority is first required to examine the depone .....

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s of said statement. Such statement cannot be relied straightway by Adjudicating Authority and can be relied only after the procedure prescribed in clause(b) of Section 9D(1) of Central Excise Act is duly followed. In the absence of such cross-examination and examination in chief, the statement on which the Revenue seeks to rely, have to be excluded from evidence. 7. I also find that the appellants have made payment to Shri S.K.Gupta by cheques. Apart from the statement of Shri S.K.Gupta that su .....

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gh broker, who was given 1% commission has given no further details. There is nothing on record to establish the said transactions. Shri S.K.Gupta has also not disclosed the name of such a broker and Revenue has not bothered to ask him about the name of the broker and to make further investigation. I further note that the inputs received by the appellants were duly entered in their RG-23A Part-I for the period from 2002, 2004-2005 and such records were subject to scrutiny by their jurisdictional .....

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d given a categorical deposition that the inputs were received by them against payment of consideration by way of cheques and such inputs were duly utilized by them. The said statement, which is exculpatory statement has not been referred to and relied upon by the authorities below who have preferred to rely upon the uncorroborated and unverified statement of Shri S.K.Gupta. When there are two different statements of two different deponents, the Revenue cannot prefer to rely upon one which is in .....

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ce produced by the Revenue to reflect upon the fact as to from where the appellants have procured such a huge quantity of inputs used by them in the manufacture of their final product. As such, fact there is a lacuna in the Revenue s investigations to that extent also. 8. At this stage reference may be made to the provisions of Rule 9(3) of the Cenvat Credit Rules which requires an assessee to acquaint himself with the identity of the supplier of inputs. The name and address of M/s. M.K.Steel gi .....

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g more or less identical facts. a) The Hon ble Jharkhand High Court in the case of Commr. Of C.Ex., East Singhbhum vs. Tata Motors Ltd. [2013(294) E.L.T. 394(Jhar.)] has held that non-payment of duty by the inputs supplier is immaterial and unless factually it was established to the contrary, it is presumed that when payments were made on the inputs, buyer is entitled to claim cenvat credit on such inputs. Hon ble High Court further observed that it is unreasonable to except buyer of such inputs .....

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he present case also, the suppliers of inputs were made by the same registered dealer M/s. M.K.Steels and the Revenue sought to deny the credit based upon the same investigations and same evidences. The said decision stands upheld by the Hon ble Allahabad High Court in the case of Commr. Of C.Ex., Cus.& Service Tax vs. Juhi Alloys Ltd. [2014(302) E.L.T. 487(All.)]. On the similar fact the decision of the Tribunal in the case Dhakad Metal Corporation vs. Commr. Of C.Ex, & S.T., Daman[2015 .....

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iana vs. Talson Mills Store [ 2015(315) E.L.T. 415 (P&H)] have also dealt with an identical situation where the Revenue alleged that the first stage dealer did not receive inputs but only supplied invoices including the assessee in that case and Tribunal held that Revenue did not conduct any further enquiry to verify whether the goods were not received by the assessee and also observed that Revenue was required to hold independent enquiry. e) Further, the Tribunal in the case of Commr. Of C. .....

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ed as an evidence for denial of the credit when payments were made by cheques. g) Further, the Tribunal in a recent decision in the case of ANJ Metal Recycling Pvt. Ltd. vs. Commr. Of C.Ex., Chandigarh [2016(337) E.L.T. 453 (Tri.-Chan.)] has extended the benefit of cenvat credit to the appellant therein by observing that as per Rule 9(3) of the Cenvat Credit Rules, 2004, the assessee is required to ensure that the inputs supplied by the dealer were accompanied with the documents and on productio .....

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. Premier Alloys Ltd. [2015(7) TMI 1173-CESTAT, New Delhi] where in the Tribunal dealt with the supplies made by the same dealer M/s. M.K.Steels. The Revenue in that case refused to deny the credit to the assessee, based upon the result of the same investigations conducted at the end of M/s. M.K.Steels and on the basis of the same evidence relied upon by them in the present case. After taking into consideration the entire facts and circumstances, the Tribunal came to a finding that the assessee .....

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