TMI Blog2018 (11) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of Iron Castings. Reliability on statements - Held that:- During the course of investigation, various statements of Shri Rakesh Gupta, proprietor of M/s Shivam Corporation were relied upon but during the course of cross examination, Shri Rakesh Gupta confirmed that his statements were recorded in threat and coercion and he has supplied goods against all the invoices and received consolidated payments periodically from the buyers in respect of all the raw materials. No counter statements of Shri Rakesh Gupta in cross examination has been produced by the revenue, therefore, the statements given by Shri Rakesh Gupta during the course of investigation cannot be relied upon - Moreover, the other supplier, namely, M/s Ganesh Enterprises and M/s Gautam Steel Traders were not appeared for cross examination, therefore, their statements cannot be relied upon. Also it cannot be said that the use of HR Coils/Sheets is not economically viable when the appellants have earned profit during the impugned period. Another allegation made against the appellant is that they have received the payments made through cheque in cash, therefore, it is only the paper transaction - Held that:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration (India) Proprietor Shri Rakesh Gupta is a second stage registered dealer. With regard to the second group which belongs to Shri Amar Nath Group, their raw materials were procured mainly through M/s Shivam Corporation and two other dealers, namely, M/s Ganesh Enterprises and M/s Gautam Steel. On the basis of investigation, during the period 2004-2005, the Revenue alleged that the appellants have procured HR Coils/Sheets alongwith raw materials, namely, Pig Iron, Iron Scrap. The H.R. Coils/Sheets cannot be used in the manufacture of Grey Iron Castings, hence, these items were neither received by the appellants nor used in their factory premises for manufacture of their finished goods and only the invoices were received to take ineligible cenvat credit. On the basis of the following evidences:- (a) Technical opinion of two experts, namely, Shri M.K. Banerjee Director of National Institute of Foundry and Forge Technology and Dr. S.K. Goel, a metallurgist. (b) Statements of some other manufacturers of grey iron castings and a broker. (c) Statements of Shri Rakesh Gupta, Proprietor of Shivam Corporation (India) and Shri RaJeev Kumar, Accountant Assistant, and the Anand Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to manufacture their goods. He also submits that the news has been published on 06.02.2004 in the Daily News Paper, i.e. Financial Express to that effect highlighting the problem due to shortage of pig iron during the impugned period. He further submits that the appellants produced two Chartered Engineer s Certificate, namely, Dr. R.N. Basu and Shri D.K. Chakravorty, who had clarified that MS Scrap can be used in both cupola as well as induction furnaces for making cast iron and offered for cross examination by the revenue, but, they were not cross examined by the adjudicating authority. He further submitted that during the course of investigation, the statement of Rakesh Gupta, proprietor of M/s Shivam Corporation was relied upon during the cross examination he stated that the statement has been recorded under threat and coercion and that he had supplied goods against all the invoices and that consolidated payments were periodically received from buyers in respect of supply of all raw materials. Therefore, the statements of Shri Rakesh Gupta given during the course of investigation cannot be relied upon. With regard to other suppliers, namely, Shri Ganesh Enterprises and M/s Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submissions that during this period, the appellants earned profit, therefore, it cannot be said that the use of HR Coils/Sheets is not economically viable. He also submits that the statement of Shri Rajeev Kumar employee of Shivam Corporation was also relied upon. As Shri Anand Kaushik did not appeared for cross examination and Shri Rajeev Kumar has denied his statement saying that it has been taken through force and coercion. Therefore, these statements are not relevant. He further submits that the bank entries have been relied upon by the department to allege that the appellant has paid through cheques and received the said money in cash. It is his further submission that the appellants have made payments in the month, for example, of April 2004 and received the goods in May, 2004, therefore, how it is alleged that there is a cash received against the amount paid by the appellant. Therefore, the said allegation is not sustainable. It is his further submission that the appellants were also not procuring pig iron from the same supplier and having the same mode of payment in the case of pig iron, there is no allegation of flow back but in the case of HR Coils/Sheets it has been a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall Group of Companies were never visited nor any statement of their employees/workers were recorded, only Director s statements were recorded which are exculpatory. Further, in respect of Amar Nath Group of companies, Shri Amar Nath s statements are all exculpatory. Therefore, the demands against the appellants are not sustainable. With regard to the penalties, it is his submission that as the demands are not sustainable, therefore, the penalties are also not imposable. Moreover, it is his submission in earlier round of litigation less penalty was imposed whereas the remand proceedings higher penalty has been imposed which is against the law. Therefore, the impugned orders are to be set-aside. 4. On the other hand, the Ld. AR supported the impugned orders and submits that in the basis of the investigation conducted by DGCEI, the case has been booked against the appellants wherein it has been established that the H.R. Coils/Sheets cannot be the input of the appellants as the said inputs is not economically viable. Moreover, the experts also stated so and on the basis of other manufacturers who have not used H.R. Coils/Sheets to manufacture the iron castings, therefore, demands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that during the course of investigation, various statements of Shri Rakesh Gupta, proprietor of M/s Shivam Corporation were relied upon but during the course of cross examination, Shri Rakesh Gupta confirmed that his statements were recorded in threat and coercion and he has supplied goods against all the invoices and received consolidated payments periodically from the buyers in respect of all the raw materials. No counter statements of Shri Rakesh Gupta in cross examination has been produced by the revenue, therefore, the statements given by Shri Rakesh Gupta during the course of investigation cannot be relied upon. Moreover, the other supplier, namely, M/s Ganesh Enterprises and M/s Gautam Steel Traders were not appeared for cross examination, therefore, their statements cannot be relied upon. The statements of other manufacturers of iron castings have been heavily relied upon by the adjudicating authority but all these statements were identically worded and these manufacturers have simply stated that they do not use H.R. Coils/Sheets to manufacture of iron castings. It does not mean that HR Coils/Sheets cannot be input to manufacture of iron castings and revenue has not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority are not admissible evidence to alleged that the appellants have not received H.R. Coils/Sheets to manufacture of Iron Castings. 10. We further taken a note of the fact that another allegation made against the appellant is that they have received the payments made through cheque in cash, therefore, it is only the paper transaction. We have seen the financial statements in the case of Marshall Group of Companies found that the invoice has been issued to them in the manufacture of May 2004 whereas the payments were made by the appellants in April 2004. How it is possible that for the alleged disputed items billed in May, 2004 and payments were made one month earlier i.e. in April 2004. Therefore, the revenue has failed to come up with positive evidence to show that the appellants have received cash against the cheques issued by the appellant for the impugned goods against the invoices. It is also revealed from the records that the appellants are procuring pig iron from the same supplier and mode payment in the same, in that circumstances, how it can be possible with regard to H.R. Coils/Sheets, therefore, the said allegation is not justified by the Revenue. The last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturer is found to be fake, the genuineness of the supplies made by the dealer to deny cenvat credit, the same view was taken by this Tribunal in the case of JSL Stainless Limited (supra). 11. We further take a note of the fact that if it is presumed that the impugned goods, namely, H.R. Coils/Sheets were not received by the appellants then from where the appellants received the raw-materials to the manufacture of such huge quantity of goods which have been cleared on payment of duty, no investigation was conducted by the revenue to that effect, in that circumstances, it cannot he held that the appellants have not received H.R. Coils/Sheets to manufacture of iron castings. 10. We also take a note of the fact that no investigation by way of visit of the factory/office of the Marshall Group of companies has been conducted, therefore, merely on the basis of statement of the Director s recorded which is all exculpatory, can t be the basis for non receipt of the inputs, therefore, the charge of non-receipt of goods is not sustainable. 12. In view of the above observations and discussions, we hold that revenue has failed to establish with the corroborative evidence that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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