TMI Blog2018 (9) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... the show-cause notice. There is no allegation that suppliers/dealers are not registered with the department. The allegation is that these dealers procure non-duty paid scrap locally and also from manufacturers by paying duty - There is no evidence put forward by the department to show that the appellants have procured such large quantities of inputs locally. Neither buyers nor transporters have been examined. There is nothing brought out from evidences as to how the appellants have been able to manufacture the finished products if they were not receiving the goods as per the cenvated invoices. It is settled law that statements cannot be relied upon without examining the witnesses under section 9D of the Central Excise Act. Mere statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tered dealer and wrongly availed credit to the tune of ₹ 49,430/-. Show-cause notice was issued proposing to recover the wrongly availed credit along with interest and also for imposing penalty. After due process of law, the original authority confirmed the duty demand along with interest and imposed penalty of ₹ 15,000/- under Rule 15 (1) of Cenvat Credit Rules, 2004. Separate penalty of ₹ 15,000/- was imposed under Rule 15 (2). Besides, imposing penalty on M/s. Santosh Kumar Steels, Shri Abirami Industries and Shri K. Rajinikath, Partner of appellant-company penalty was imposed on Shri M. Manikandan and Shri Ramanathan, Proprietor of M/s. Abirami Industries. Aggrieved by the confirmation of demand as well as the impositi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per invoices. He has not stated that he has supplied only non-duty paid scrap to appellants. What he has stated is that they purchase both duty paid as well as non-duty paid scrap. The appellant has received goods and paid duty on them. Hence, the credit availed is fully correct. He adverted to the annexure to the show-cause notice and submitted that the dispute is with respect to three invoices supplied by M/s. Santosh Kumar Steels. These three invoices are dated 03.03.2005, 05.03.2005 and 16.03.2005. The show-cause notice is dated 10.03.2010 which is almost beyond five years of the date of invoices. The department though alleges that there was cash transaction of unauthorized invoices issued by the registered dealers, there is no evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o them without bills. They sell the above scraps to those who do not require cenvated bills. Sometimes, they receive only invoices but they did not receive the goods particularly in respect of MS Wires and Coils from M/s. Karpagam Steels and M/s. Abirami Industries. M/s. Santosh Kumar Steels utilized these invoices for passing on the Cenvat credit to manufacturers like the appellants. He argued that it is clear that the appellants have been engaged in receiving the cenvated invoices without receiving goods into the factory. The three invoices which were unearthed by the department during the time of investigation would support the statements. Therefore, the demand confirmed is legal and proper. 4. Heard both sides and perused the records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht out from evidences as to how the appellants have been able to manufacture the finished products if they were not receiving the goods as per the cenvated invoices. It is settled law that statements cannot be relied upon without examining the witnesses under section 9D of the Central Excise Act. Mere statements cannot be a ground for confirming the demand in a serious charge of clandestine availment of credit. On perusal of the Order-in-Original, we find that it is not a speaking order. Except for reproducing the statements recorded and the show-cause notice, the adjudicating authority has not discussed about the evidences relied for confirming the demand. 6. From the discussions made above, I am of the view that the department has fail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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