TMI Blog2022 (3) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... allegations were made that the Appellant had taken Cenvat credit without receipt of the capital goods - reliance can be placed in the case of Uniworth Textiles Ltd Vs. CCE, Raipur [ 2013 (1) TMI 616 - SUPREME COURT ] and Kishanch and Chellaram Vs. Commissioner of Income Tax [ 1980 (9) TMI 3 - SUPREME COURT ] wherein it has been held that the burden of proof is on the person who makes the allegation and not vice versa - the present case is on a higher pedestal as the capital goods received from M/s. Saha Industries were duly installed in the factory of the Appellant and were being used in the manufacture of finished goods. The Department failed to bring on record any contrary evidence. The Hon ble Allahabad High Court in Juhi Alloys Ltd [ 2014 (1) TMI 1475 - ALLAHABAD HIGH COURT ] relied upon the findings of the Tribunal as well as Commissioner (Appeals) wherein it was held that the transaction on the part of the assessee was bona fide and a buyer can take only those steps which are within his control and would not be expected to verify the records of the supplier to check whether in fact he had paid duty on the goods supplied by him. The only reasonable step which he can take i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Rules, 2005. 2.1 The Officers of the Anti-Evasion Unit, Central Excise, Kolkata-V Commissionerate visited the premises of M/s.Saha Industries on 30- 01-2008. Various statements of the proprietor of M/s. Saha Industries were recorded. It was gathered by the officers that the unit of M/s.Saha Industries was operating from a small factory of about 300 sq. ft and came to the conclusion that M/s.Saha Industries had poor infrastructure and the auxiliary machinery. Therefore it was not possible to consume huge quantity of inputs and to manufacture huge quantity of sophisticated and automated machinery shown in their finished goods. The statements of some of the transporters were also recorded to substantiate the said allegation. An expert opinion of Chartered Engineer of August, 2008 was also obtained and relied upon. 2.2 As a follow up, the unit of the Appellant was also visited on 02- 04-2008 and a statement of Shri Niranjan Gourisaria, Senior General Manager was recorded wherein he stated that the goods were delivered by M/s.Saha Industries to them and freight was paid by the said M/s.Saha Industries. 3. A Show Cause Notice (SCN) dated 01-07-2009 was issued to the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Jayanta Kumar Saha, there was no mention of manufacture of goods such as graft, guide box, gear box, conveyor system etc that M/s.Saha Industries was not a manufacturer of excisable goods and invoices raised were false invoices and that no goods manufactured by M/s. Saha Industries were ever received by the Appellant; that M/s. Saha Industries had to reverse a huge amount of Rupees Ten lakhs availed as Cenvat credit on materials which he failed to establish to have been received in his factory for manufacture of excisable goods. 5. We have heard Shri K.K. Anand, Ld. Counsel for the Appellant and Shri J.Chattopadhyay, Ld. Authorized Representative on behalf of Revenue through video conference on 9/10-12-2021. 6. Shri K.K. Anand, Ld. Counsel for the Appellant advanced the following submissions:- (i) The plant and machinery on the strength of 48 invoices were duly received by them on the strength of duty paid invoices, the same were duly entered into their statutory records, the payments for the said purchases were made through banking channels and the said plant and machinery was duly installed in their factory. In this regard, he took us through copies of the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods had not been supplied to the Appellant unless concrete and positive evidence was brought to this effect. (v) That, the Ld. Commissioner has himself accepted in para 7.3 of his order that the capital goods were duly received by the Appellant. The only contrary finding of the Ld. Commissioner was that the goods received by the Appellant were not manufactured by M/s.Saha Industries. This would mean that the Ld. Commissioner has not accepted the allegations leveled in the show cause notice that the goods were not received by the Appellant at all. According to him this portion of the order has been duly accepted by the department as the said portion of the order has not been reviewed by the department. Therefore the burden of proof that the Appellant did not receive the goods from M/s. Saha Industries but from other source was squarely on the department. According to him it is a well settled principle of law that the onus to prove is on the person who makes the allegation. In this regard he placed reliance on the law laid down by the following two judgments of the Hon ble Supreme Court:- (a) Uniworth Textiles Ltd Vs. CCE, Raipur reported in 2013 (288) ELT 171 (SC). ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding by the Ld. Commissioner that even prior to the said date the raw material was not received by M/s.Saha Industries in order to manufacture the finished goods. (ix) That on the finding of the Ld Commissioner that M/s. Saha Industries had declared themselves to be the manufacturer of motors, electrical stampings etc and as per their self declaration they were not manufacturers of gears, rolls or conveyor systems, he submitted that a detailed statement of Shri Jayanta Kumar Saha was recorded wherein he was not confronted with the 48 invoices under which the Appellant had received the various types of capital goods. Even otherwise, he nowhere stated that they had not supplied any capital goods to the Appellant. (x) That on the evidentiary value of the certificate of the Chartered Engineer obtained by the Department in the month of August 2008 referring to the inspection of infrastructural facilities of M/s.Saha Industries, the Ld. Counsel submitted that the said Chartered Engineer had inspected the unit only in the month of August 2008 i.e. much subsequent to the period when the actual manufacturing took place. Therefore no reliance can be placed on the said Chartered E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court in the case of Gian Chand Brothers Vs. Rattan Lal Singh reported at MANU/SC/0015/2013 wherein in para 28 of their judgment it has been held that accounts regularly maintained in the course of business are to be taken as correct unless there are strong and sufficient reasons to indicate that they are unreliable. (xiv) That reliance has been placed on the statements of six transporters and some vehicle owners. It was alleged in the show cause notice that some transporters who had transported the goods from M/s. Saha Industries were found to be non-existent, some denied having transported any goods from M/s. Saha Industries but some also stated that they had transported the plant and machinery from M/s. Saha Industries. But according to the Ld. Counsel in cases of alleged non-existent transporters, no panchnama has been relied upon in the relied upon documents. Similarly no statement of any transporter has been relied upon in the show cause notice. In this regard he invited our attention to Annexure-R to the show cause notice which lists only seven documents which have been relied upon in the present proceedings. Neither any panchnama nor any statement refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. He therefore prayed for setting aside the impugned order and allowing the appeal. 7. The Ld. Authorized Representative referred to Revenue advanced the following submissions:- (i) The Ld. Authorized Representative referred to various paragraphs of the show cause notice which related to the activities of M/s.Saha Industries. (ii) He drew our attention to para 5 of the show cause notice wherein it was categorically alleged that M/s. Saha Industries had shown an estimated investment of ₹ 5 lacs in land, plant and machinery in their Registration Application and they had given the plan outlay of the factory premises as well, which had a shed measuring 25ft x 12 ft and marked C in the site plan. (iii) That there was no electricity connection in the name of M/s.Saha Industries. The electricity connection in the said premises was in the name of M/s.Saha Engineering Works supplied by M/s. CESC Ltd. M/s. Saha Industries is stated to have consumed electricity from that connection. Further as per the reports, consumption of electricity was very nominal as compared to the volume of manufacturing undertaken by M/s.Saha Industries. He relied upon the Chartered Engin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice it was alleged that the Appellant had utterly failed to verify the antecedents of the supplier-manufacturer for the purpose of availing of Cenvat credit. This would also mean that the goods were actually received by the Appellant without verifying the antecedents of the supplier- manufacturer. It is well settled law that onus of proof that the Appellant received the capital goods from some other source was squarely on the department which it failed to prove On the contrary in the show cause notice sweeping allegations were made that the Appellant had taken Cenvat credit without receipt of the capital goods. In this regard, we have gone through the two judgments of the Hon ble Supreme Court relied upon by the Ld. Counsel in the case of Uniworth Textiles Ltd Vs. CCE, Raipur reported in 2013 (288) ELT 171 (SC) and Kishanch and Chellaram Vs. Commissioner of Income Tax reported in 1980 (Supp) SCC 660 wherein it has been held that the burden of proof is on the person who makes the allegation and not vice versa. Further the Hon ble Punjab Haryana High Court in the case of CCE, Chandigarh Vs, Neepaz Steels Ltd reported in 2008 (230) ELT 218 (P H)has categorically held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have relied upon the said enquiries or statements of the transporters unless the same were made part of the relied upon documents. 9.2 That the Ld. Commissioner has tried to justify denial of Cenvat credit to the Appellant by rendering findings in para 7.22 of his Order that M/s. Saha Industries was not an assessee of Central Excise manufacturer of excisable goods and had no power to issue central excise invoice on which Cenvat credit could be availed. We find these findings of the Ld. Commissioner are beyond the scope of the Show Cause Notice. In fact, we have gone through the Show Cause Notice and find that it has been clearly stated in para 2.1 of the Show Cause Notice that M/s.Saha Industries at BBT Road, Maheshtala, 24 Pgs. (South) holding Central Excise Registration No. AAGCS9364QXM001 on 30-01-2008. Hence this finding cannot be sustained. In support of our findings we rely upon the three judgments of the Hon ble Apex Court relied upon by the Ld. Counsel wherein it has been clearly laid down that the Adjudicating Authority cannot travel beyond the scope of the show cause notice. Further it cannot be disputed that M/s.Saha Industries was paying the Central Excise d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of C.L. Engg. Ltd the Tribunal had rendered categorical finding that inputs on which Cenvat credit was availed by the party were never transported to their factory on the basis of preponderance of probability. In the present case the officers from Hdqrs. Anti-Evasion Unit, Central Excise, Kolkata-V Commissionerate had duly visited the unit of the Appellant on 02-04-2008. Though they recorded the statement of their Sr. General Manager but the officers chose not to inspect the plant and machinery which was received from M/s.Saha Industries and was lying installed as per the statutory records. 9.5 We have also gone through the two orders of this Tribunal one in the case of the sister concern of the Appellant being final Order No. 77032/2019 dated 25-10-2019 and another in Appellant s own case being Order No. 75111/2020 dated 25-10-2019 wherein this Tribunal was dealing with identical issue though the supplier of the capital goods was one M/s. Ashok Electrical Stampings (P) Ltd . In fact the name of M/s. Ashok Electrical Stampings (P) Ltd has also figured in para 4 of the present show cause notice wherein inquiries were conducted at the factory premises of one M/s. Eritech Ltd (Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon le High Court held as under:- 7 . In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps to ensure that the inputs in respect of which he has taken the Cenvat credit are goods on which the appropriate duty of excise, as indicated in the documents accompanying the goods, has been paid. Admittedly, in the present case, the assessee was a bona fide purchaser of the goods for a price which included the duty element and payment was made by cheque. The assessee had received the inputs which were entered in the statutory records maintained by the assessee. The goods were demonstrated to have travelled to the premises of the assessee under the cover of Form 31 issued by the Trade Tax Department, and the ledger account as well as the statutory records establish the receipt of the goods. In such a situation, it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee, in the present case, was found to have duly acted with all reasonable diligence in its dealings with the first stage dealer. The view which the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -IV are engaged in the manufacture of Ferro Manganese falling under chapter heading 7202 of the Central Excise Tariff Act, 1985. The department has disputed the cenvatavailament by the unit for the period May 2003 to June 2008 on capital goods such as electrical wires, electrical stampings, electrical control panels, switch gear, machines and mechanical appliances and tools etc. A show cause notice dated 04- 12-2008 has been issued which was confirmed by the Order-in- Original No. 115/Commr/Bol/2009 dated 31-12-2009, wherein a duty of ₹ 3,07,48,020/- was confirmed with equal penalty and a penalty of ₹ 50,000/- was also imposed under Rule 13(1) of Cenvat Credit Rules, 2002. Hence the appeal. 3. Ld. Counsel for the appellants submits that there was an objection of this nature raised against another unit of the appellant for which a show cause notice was also issued and confirmed and the matter was traveled up to this Bench. This Bench vide Final Order No. 77032/2019 dated 25-10-2019 has allowed the appeal filed by the appellants holding that the case is squarely covered by the Hon ble High Court of Allahabad s decision in the case of Juhi Alloys Ltd [2014 (302) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Postal authorities according to which the said party was not in existence at the said place. This Tribunal after analyzing the entire evidence held that the best evidence would have been for departmental officers to physically visit the place and draw a panchnama after making enquiries from the locality. It has also been held that the department had not denied that the dealer, M/s. Dankuni Steel Ltd was registered with the jurisdictional Central Excise formation. As per extant departmental instructions the premises were required to be physically inspected within 5 days of granting registration. It has to be presumed that these instructions were duly followed. In that case it has to be assumed that during the relevant period the dealer was operating from the registered premises. Therefore the impugned order was set aside and the appeal of the party was allowed. 9.9 We find that in the present proceeding M/s. Saha Industries were duly registered with the Central Excise department. They worked for nearly two years and made clearance of whopping ₹ 80.11 crores. It cannot be denied that during those two years the departmental officers would have visited the said unit seve ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
