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TMI Blog2018 (9) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended. On the basis of investigation, the DGCEI alleged that the appellants were indulged in evasion of Central Excise duty by way of (i) fraudulent availment of cenvat credit and (ii) fraudulent availment of area based exemption Notification No. 50/2003-CE dated 10.06.2003. The investigation was started on the premises that the goods manufactured by M/s AO has been shown on paper but the same has been manufactured and cleared by M/s AI without payment of duty. On the basis of that intelligence, the factory premises of both the appellants were visited on 17.05.2012 and certain documents/records were recovered. Various statements were recorded and on the basis of the investigation, the show cause notice was issued to the appellants on the following grounds: (A) M/s AO has cleared finished goods to M/s AI in the guise of forgings and mis-used the exemption Notification No. 50/2003-CE. (B) M/s AO has fraudulently availed cenvat credit of Rs. 55,48,523/-without actually receiving goods in its factory (C) As M/s AO and M/s AI are related person and the M/S AO has undervalued its goods sold to M/s AI. 3. The matters were adjudicated and benefit of exemption Notification was den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for export or in domestic market was brought to the notice of the ld. Commissioner by way of affidavits which are admissible in terms of decision of the Hon'ble Apex court in the case of Mehta Parikh & Co. v. CIT-AIR 1956 SC 554. But the adjudicating authority did not consider the same. It is his further submissions that the ld. Commissioner has mis-construed the expression CP as chrome plated spanner. In fact, CP stands for Cold Pressed and not Chrome Plate. These spanners were sent to M/s AI for further processing as "Nickel Chrome Plated" Hand Tools. To that effect, they filed affidavit and the same has not been considered and no cross objection was granted. It is his submissions that it has been alleged that forgings of spanners was also received at M/S AO and the same were also shown to have been cleared by M/s AI as fully finished spanners. It is submits that the ld. Adjudicating authority did not appreciate the fact that the M/S AO had transported the said forgings along with forgings manufactured by it to M/s AI and this procedure was adopted just to save transportation cost as transportation of small quantity of spanners was not economically viable. It is further submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not received in the factory of the appellant, from where the appellant has procured the goods. It is his submissions that there is nothing on record in terms of statement of transporter regarding unloading of goods, buyer's details, money transaction etc., to substantiate the allegation of non receipt of goods in M/S AO's factory. Therefore, demands are not sustainable in the light of the decision of this Tribunal in the case of Century Metel Recycling Pvt. Ltd. reported in 2016 (333) ELT 483(Tri. Del.) and A.R. Shanmugasundaram reported in 2016 (333) ELT (158) Tri. Chennai, wherein it has been held that charge of clandestine removal cannot be based merely on statement and private records unless corroborated by any other evidence. 8. He is further submits that for the invoice issued by M/s Atul Kumar Rohit Kumar, invoice issued by M/s K.J. Steel Rolling Mills, the goods were directly sent to the job worker or cleared as such upon payment of duty, therefore, cenvat credit cannot be denied. 9. In some of the case, cenvat credit sought to be denied on the ground that there was no entry in the private records but their entry is in the statutory records and the said goods has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its colour. In case of any visible fault, the spanners are sent back for repair/rectification of defects, if possible whereupon it against comes back for electroplating and in case the repair/rectification of defect was not possible, the same are scrapped and sold as waste and scrap. Similarly, spanners manufactured for export were subjected (by randomly selecting out of the export lt) salt spray test to check the quality of electroplating. In case, randomly selected spanner fails in test, the entire lot is rejected and sent back for repair/rectification of defects whereupon they again come back for electroplating. It was due to this reason that the quantity shown in the Electroplating Production Reports or Work Order Progress Chart are more than the quantity recorded in RG 1 register." It is above said explanation has been ignored by the ld. Commissioner. Further, the appellant has explained CP stands for 'Cold Pressed' whereas it has been presumed by the adjudicating authority as 'Chrome Plate' and explanation given by the appellant by way of affidavits has not been considered. In that circumstance, it cannot be presumed that CP is used for "Chorme Plates", therefore, on that gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods. We find that the fact on record that M/s AO is clearing the goods on the same price to M/s AI as well as to independent buyers, therefore, Rule9 of the Valuation Rules, is not applicable to the facts of the case. The same view was taken in the case of M/s JMP Castings (Supra) wherein this Tribunal observed as under: "7. It is admitted fact that the appellant is not clearing the100% of the production to the related person and only 80% to 90% of the production was cleared to the related person, therefore, it is to be seen whether the provisions of Rule 9 read with Rule 8 of the Central Excise Valuation Rules, 2000 are applicable to this case or not? For better appreciation of the provisions of Rule 10, Rule 9 and Rule 8 are extracted here below: Rule 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture or other articles, the value shall be 110% of the cost of production or manufacture of such goods. Rule 9. When the assessee so arranges that the excisable goods are not sold by him except to or through a person who is related in the manner specified in either of sub-clause (ii) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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