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2019 (4) TMI 432

on in the case is that farmers from whom the inputs were purchased were non-existence - Held that:- The investigation was not conducted at the end of the appellants and whole case has been based on the investigation conducted at Commissioner Central Excise, Merrut-II. Without investigation, it cannot be held that the appellant was not manufacturer during the impugned period. Moreover, the entries of vehicles at the toll barriers also certified that the movements of raw material and finished goods - during the period of investigation itself, the appellants were allowed continue their activity by procuring inputs from UP based supplier and selling goods manufacturing to their buyers. During the course of investigation, itself shows that the allegation is only on the basis of the assumption and presumption, therefore, it cannot be held that the appellants were not manufactured the goods during the impugned period. - The appellant M/s Abhay Chemicals was the manufacturer during the impugned period and paid the duty on the goods manufactured by them, therefore, duty cannot be demanded on the allegation that the appellant was not a manufacturer. Consequently, the cenvat credit can’t .....

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red were sold to UP based manufacturers who in turn partially exported their finished goods and partially sold in domestic market. The Merrut Commissionerate issued show cause notices to UP based manufacturers to deny cenvat credit availed on goods purchased from J&K based suppliers and at the insistence of Meerut Commissionerate, the jurisdictional Commissionerate issued show cause notices to various J&K based manufactures raising demand of duty refunded to them who are availing area based exemption under Notification No. 56/2002-CE dated 14.11.2002. The adjudicating authority has confirmed demand on the grounds that the farmers are non existence ensuring non supply of raw material by commission agents to J&K based units and absence of evidence of manufacture by the appellants. Therefore, by way of the impugned order, the cash refunded to the appellants, namely, Abhay Chemicals was sought to be demanded and cenvat credit availed by M/s Siddhant Chemicals & M/s Neeru Enterprises was denied and penalties on all the appellants were imposed. Against the said orders, the appellants are in appeals before us. 3. Ld. Counsel appearing on behalf of the appellants and submit .....

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erse was reported. It is impossible to manufacture and export of the goods without purchase of raw material. He further submits that the appellant has installed DG sets and got the approval for installation of those DG sets from General Manager, DIC, Jammu and also got the consent of Pollution Control Board and its installation, Chief Engineer, Elect. Maintt. & R.E. have also granted permission to install the transformers against the sanctioned load. He also submits that report was sought from the preventive staff, Jammu by the Commissioner, Merrut-II ,with regard to the activity of the appellant and as per report dated 28.04.2010, it was opined that entries of raw material DIC officers was regularly verified purchase consignments, Range Officers time to time visit the factory and nothing adverse was reported. He was further submits that the appellant was operating under Notification No. 56/2002-CE dated 14.11.2002 and filing refund claim of the duty paid through PLA and all the refund claims have been sanctioned to then after due verification by the Jurisdictional Range Officer by passing speaking orders. He further submits that raw material received by the appellant were used .....

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as been issued by invoking extended period of limitation, therefore, the same is not sustainable. 6. He also submitted that the department drew samples for final product on various occasions. Moreover, PBC checks were undertaken, he also submits that in case of Nanda Mint and Pine Chemical Ltd., a similar show cause notice were issued and demand of duty was confirmed but this Tribunal in Appeal No. E/60052/2016 vide Final order No. 63177 / 2018 set aside the demand and held that the said assessee is a manufacturer of goods. 7. On the other hand, the ld. AR reported the findings of the impugned order. 8. Heard the parties and considered the submission. 9. We find that in this case the sole allegation against the appellants are based on the investigation conducted by Commissioner of Central Excise, Merrut, and as per the investigation, it is alleged that farmers from whom the inputs were purchased were non-existence. Therefore, commission agents never supplied inputs to the appellant and the appellant did not manufacture the goods. Consequently, they have not sold the goods and it was alleged that the appellant has not manufactured the goods at all. 10. We further take note of the fa .....

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27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II. 11. We further take of the fact that the similar issue on identical facts came up before this Tribunal in the case of Nanda Mint and Pine Chemicals Ltd. (Supra), wherein this Tribunal observed as under: 6. We find that in this case the sole allegation against the appellant is based on the investigation made by Commissioner of Central Excise, Merrut, and as per the investigation, it is alleged that farmers from whom the inputs were purchased were nonexistence. Therefore, commission agents never supplied inputs to the appellant and the appellant did not manufacture the goods. Consequently, they have not sold the goods and it was alleged that the appellant has not manufactured the goods at all. 7. We take a note of the fact that the check post movement of trucks which were carrying inputs as well as finished goods were found entered. We further take note of the fact that the appellant has produced the evidence of the entry of all the transport vehicles i.e. trucks which have entered in the state of Punjab and have left the state of Punjab, as the s .....

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of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II. 9. The said report also support the case of the appellant wherein it has been clearly mentioned that during the periodical checks by the departmental officers, the appellant found manufacturing the goods. Moreover, no discrepancy was found and on toll barriers it was found that the vehicles carried inputs/finished goods found entered. Moreover, the District Centre also certified the said fact. 10.We further take note of the fact that the various other departments namely Pollution Control Department, District Industries Department, Electrical Department have visited the factory of the appellant and found functioning. All these facts have not been disputed by the Revenue. As there is no corroborative evidence to show that the appellant were not manufacturing the goods, therefore, the allegation alleged in the show cause notice is not sustainable. 11.We further take note of the fact that on the basis of the same investigation conducted by the Commissioner of Central Excise, Merrut, the case was bo .....

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on record and submitted by the appellant it was the duty of the Original Authority to accept them and not to discard by saying that the Officers have not seen the goods being manufactured by their own eyes. Further, the receipt of inputs was verified by the Officers of Central Excise Department and sample of the same were also drawn and forwarded for Chemical Examination. Such evidence was also not accepted by the Original Authority, Therefore, it appears that the Original Authority was pre-determined to adjudicate the matter in the manner in which he has decided the issue and he was not just and fair and did not discharge his duty as an independent adjudicator. We, therefore, set aside both the impugned Orders-in-Original dated 29/01/2010 & 29/03/2011 and allow all the appeals filed by appellant. The appellant shall be entitled for consequential relief. All the demand and penalties imposed are also set aside. All the Miscellaneous/Stay Applications stand disposed, as infructuous. 12.In view of the above observations, we hold that without bringing any concrete evidence against the appellant on record, the proceedings against the appellant are not sustainable, therefore, the sh .....

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