TMI Blog2023 (11) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... possible to identify the nature of scrap from the photographs and that Panchnama does not disclose educational qualification and work experience of witnesess and hence they could not have been considered as experts for forming opinion on the nature of scrap - Mere fact that Respondent has also been buying bazaar scrap on which no duty is paid itself is not enough to hold that all 1366 consignments of duty paid inputs were not received by the Respondent during the period April 2007 to August 2010 and that the final products cleared during this period on which duties were admittedly paid were entirely manufactured out of bazaar scrap. As regards Respondent having not engaged any chantiwala (scrap sorter) the show cause notice in para 6.3.21 relies upon the statement of brokers which are found to be not reliable by the commissioner in absence of any corroborative evidence and further, some have been retracted/sought to be corrected by brokers by way of filing affidavits. Be that as it may, no question was put forth to the partner of Arsh Alloys in the statements dated 18.11.2010 and 13.03.2012 that in absence of Chantiwala having been engaged how they were able to purchase the scr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SE Appeal No. 12643 of 2019-DB -E/CO/10141/2021 EXCISE Appeal No. 12644 of 2019-DB -E/CO/10041/2020 EXCISE Appeal No. 12645 of 2019-DB -- EXCISE Appeal No. 12646 of 2019-DB -- EXCISE Appeal No. 12647 of 2019-DB -- EXCISE Appeal No. 12648 of 2019-DB -- EXCISE Appeal No. 12649 of 2019-DB -- EXCISE Appeal No. 12650 of 2019-DB -- EXCISE Appeal No. 12651 of 2019-DB -- EXCISE Appeal No. 12652 of 2019-DB -- EXCISE Appeal No. 12653 of 2019-DB -E/CO/10144/2021 EXCISE Appeal No. 12654 of 2019-DB EXCISE Appeal No. 12655 of 2019-DB -E/CO/10145/2021 - - EXCISE Appeal No. 12656 of 2019-DB E/CO/10146/2021 EXCISE Appeal No. 12657 of 2019-DB -E/CO/10112/2020 EXCISE Appeal No. 12658 of 2019-DB -E/CO/10094/2020 EXCISE Appeal No. 12659 of 2019-DB -E/CO/10147/2021 EXCISE Appeal No. 12660 of 2019-DB -E/CO/10147/2020 EXCISE Appeal No. 12661 of 2019-DB -E/CO/10148/2021 EXCISE Appeal No. 12662 of 2019-DB -- EXCISE Appeal No. 12663 of 2019-DB -- EXCISE Appeal No. 12664 of 2019-DB -- EXCISE Appeal No. 12665 of 2019-DB EXCISE Appeal No. 12666 of 2019-DB -E/CO/10149/2021 EXCISE Appeal No. 12667 of 2019-DB --- EXCISE Appeal No. 12668 of 2019-DB -- EXCISE Appeal No. 12669 of 2019-DB -E/CO/10138/2021 EXCISE Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-DB -E/CO/10134/2021 EXCISE Appeal No. 12726 of 2019-DB -E/CO/10133/2021 EXCISE Appeal No. 12727 of 2019-DB -E/CO/10414/2022 EXCISE Appeal No. 12728 of 2019-DB -E/CO/10131/2021 EXCISE Appeal No. 12729 of 2019-DB EXCISE Appeal No. 12730 of 2019-DB EXCISE Appeal No. 12731 of 2019-DB -E/CO/10046/2020 C.C.E. S.T.-BHAVNAGAR Versus ARSH ALLOYS , MADHAV STEEL, A G ENTERPRISE, UNIQUE SHIP BREAKING CORPORATION, LUCKY STEEL INDUSTRIES, SHREE SAIBABA SHIP BREAKING COMPANY, ARYA SHIP BREAKING COMPANY PRIVATE LIMITED, JSK SHIP BREAKING, MALWI SHIP BREAKING COMPANY, AGRASEN SHIP BRAKERS PRIVATE LIMITED, KHANBHAI ESSOFBHAI, INDUCTO STEEL LTD, ASHISH SHIP BREAKERS P LTD, SHRI AMINBHAI ISMAILBHAI LAKHANI, MADHAV INDUSTRIAL CORPORATION, BHARAT SHIP BREAKING CORPORATION, SHRI JAYPRAKASH SINGH, AKHIL SHIP BREAKING PRIVATE LTD, KIRAN SHIP BREAKING COMPANY, ALANG AUTO GENERAL ENGINEERING CO. PVT LTD, M K SHIPPING ALLIED INDUSTRIES PVT LTD, ANUPAMA STEEL LIMITED, R L KALTHIA SHIP BREAKING PRIVATE LIMITED, DIAMOND MARINE, KALIMA STEEL ROLLING MILLS, BANSAL INTERNATIONAL LIMITED, LEELA SHIP RECYCLING P LTD, RAMESHWAR STEELS REROLLING MILL, JALARAM INDUSTRIAL CORPORATION, BANSAL SHIP BREAKNG P LTD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng/furnace units who were the alleged actual buyers of scrap of iron and steel and 66 ship breaking units who have issued duty paid invoices to M/s. Arsh Alloys and made co-noticees by way of issuing Addendum to show cause notice. 2. Briefly the facts of the case are that respondent-assessee, M/s. Arsh Alloys ( Respondent herein after) is engaged in manufacture of excisable goods namely M.S. ingots in their Induction furnace unit. For the purposes of manufacture of the said goods, the Respondent mainly purchased duty paid inputs such as waste and scrap of iron and steel . The Respondent availed cenvat credit of duty paid on the inputs received and used in their factory of production. During the period April 2007 to August 2010, the Respondent purchased waste and scrap of iron and steel from various ship-breaking units who cleared the same ex-factory (ship-breaking yards) on payment of applicable central excise duty. 2.1 On 21-8-2010, the officers of department carried out search at premises of Respondent, Ahmed Steel and Shabana Steel Pvt Ltd acting upon intelligence that these units are engaged in availing cenvat credit without receipt of goods physically or are divertin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding in the impugned order that it can t be established from the photographs of waste and scrap taken during the Panchama that the said waste and scrap were of discarded household items, oil tins, drums, cycle parts, auto parts, etc. is also not proper; adjudicating authority should have appreciated that the demand of duty is not restricted to the quantity of stock of the scrap available as on the date of the search i.e. 21.08.2010 and that panchnama also records that no goods of ship-breaking yard were physically available in stock; 3.3 That adjudicating authority has erred in not appreciating the fact that Respondent was bringing bazaar scrap and not keeping records of it as required in terms of Rule 10 of Central Excise Rules and that such bazaar scrap was being brought to cover up the non-receipt of duty paid scrap from ship-breaking units; that there was no evidence to suggest that bazaar scrap is being used in the manufacture of the final products in addition to the quantity procured from the ship-breaking units. 3.4 The findings in the impugned order that the statements of truck owners/authorised persons are not enough material and were required to be supported by ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the names in the Note book seized from the factory premises of M/s. Arsh Alloys and confirmed that the details thereof were of the amounts returned in cash against the payments made in cheques against some of the invoices without the delivery of goods by the ship- breakers. As regard the source of non-duty paid bazaar scrap, most of the traders of non-duty paid bazaar scrap in their statements have confirmed having supplied the goods regularly in the last three years to M/s. Arsh Alloys. The adjudicating authority has failed to consider the fact that 3 drivers of tempo who were caught during transit checks, in their statements had also confirmed that they had regularly supplied non-duty paid bazaar scrap to M/s. Arsh Alloys. 3.7 The adjudicating authority has also failed to consider the fact that 10 owners/authorized representatives of the re-rolling mills/furnace mills whose names were disclosed by the brokers, have admitted in their statements that they have received consignments diverted by the brokers/Arsh Alloys without any invoice and paid the proceeds in cash. 3.8 The adjudicating authority has failed to consider the statements of all 17 brokers appearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnels and returned the amount in cash to M/s. Arsh Alloys/re-rolling mills after deducting their charges for issuing paper invoices which resulted into fraudulent availment of cenvat credit by M/s. Arsh Alloys. 3. Shri Paresh M. Dave, learned Counsel appearing on behalf of M/s. Arsh Alloys urged that adjudicating authority after examining all the material above viz. the documentary evidences as well as the statements of various person and against that the evidences lead by the Respondent in the form of statutory registers like RG 23 part-I and II and records to prove that there was no case of non-receipt of inputs. After considering these evidences adjudicating authority has held that goods were actually supplied by the input suppliers to the respondent and the respondent was eligible to claim the cenvat credit of duty paid on the said inputs. Respondent-assesse has mainly submitted as below: 4.1 There is no evidence on record that the respondent has availed any cenvat credit on any bazaar scrap and there is also no demand of cenvat credit in respect of the quantity of goods found at the premises of the Respondent; it is not shown by the department that the panchas shri chotu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Respondent that adjudicating authority has righty held at para 29.13 that it is not correct to allege that the goods were not delivered when the invoices issued by the suppliers are genuine and the raw materials were duly accounted for in their raw material stock register in RG 23A Part I showing receipt and utilization of inputs in the manufacture of final product; that adjudicating authority has rightly held in para 29.26 that it is not even suggested in the show cause notice that the statutory records/registers were fabricated or manipulated or that the Range and Divisional officers who verified and scrutinized such statutory records and registers of the Respondent as well as that of manufacturers of the inputs viz. Ship Breakers have noticed any manipulations or falsifications while finalizing the assessments; that such documentary evidence unless proved to be falsified or manipulated has to be given due weightage. 4. On behalf of ship breakers, arrayed as respondents, it was submitted that they have denied the allegation of having not delivered the scrap under the invoices in question. It was submitted that they have cleared scrap on payment of applicable duty on ex-fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on therefrom. It can be seen that working experience of panchas can be a valid ground to test the admissibility of their opinion, but their working experience is not shown by department at any stage of the investigation. That apart there is no evidence mentioned in the appeal that a small quantity of goods found at the respondent s premises was actually in the nature of bazaar scrap. In that view, opinion of panchas cannot be relied upon to hold that the entire stock of inputs found at the premises of the Respondent was in the nature of bazaar scrap and hence ground of appeal that working experience would serve the purpose cannot sustain. Mere fact that Respondent has also been buying bazaar scrap on which no duty is paid itself is not enough to hold that all 1366 consignments of duty paid inputs were not received by the Respondent during the period April 2007 to August 2010 and that the final products cleared during this period on which duties were admittedly paid were entirely manufactured out of bazaar scrap. 5.3. As regards Respondent having not engaged any chantiwala (scrap sorter) the show cause notice in para 6.3.21 relies upon the statement of brokers which are found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r unit, he would be in position to specify as to where the said goods were delivered. There is no investigation undertaken or evidence gathered at the premises of re-rolling mills to whom goods were allegedly diverted. Similarly, reliance has been placed on the statement dated 16-3-2012 of broker named Priyesh Bharatbhai Parekh is also misplaced which in first place does not refer to the Respondent but Ahmed steel. It appears, the brokers have opined based on the statement of vehicle owners and entries of the note book and not based on perusal of the records of transaction maintained by them. There are otherwise no records of brokers investigated. Since, the statements are not supported with records maintained by the brokers with regard to the transactions in question; not even one entry in the note book stands corroborated with the records of the brokers, such statements of brokers were rightly discarded by the Learned Commissioner. 5.5. For the above reasons, Learned Commissioner has also discarded the statements of owner of vehicles and statements of authorized persons of rerolling mills being inadmissible evidence on account of absence of any investigation or records of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch documentary evidence unless proved to be falsified or manipulated has to be given due weightage. Moreover, it is a settled law that where there are tangible documentary evidence in favour of the assesse and even there are overall statements of third party contradicting the documentary evidence, such tangible documentary evidence must be given primacy over the overall statements. This is supported by catena of judgements, some of the judgments are extracted below: Monarch Metal 2010(261)ELT 508 (Tri-Ahm) : 8. As is clear from the above that the appellate authority has not considered and appreciated various evidences on record which stand discussed in detail by the original adjudicating authority. He has allowed Revenue s appeal on short ground which was the basis for the issuance of show cause notice that LR do not bear the check-post stamp and the statement of the transporter. The appellants have rightly contended that statement of the transporter being in the nature of co-accused, cannot be made the sole basis for holding against the appellant, unless corroborated with material particulars. I find that there is no such evidence on record. On the contrary, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 237) E.L.T. 175 (Tri.-Del.) as also from the Tribunal s decision in case of M/s. Shree Jagdamba Castings (P) Ltd. v. CCE, Bhopal, 2006 (206) E.L.T. 695 (Tri.-Del.). It has been held in said judgments that the credit availed on the basis of invoices issued by the registered dealer, cannot be denied on the ground that the transporters have admitted the fact of nontransportation of the goods and the addresses of truck owners were found to be fake. Similarly, in the case of M/s. Malerkotla Steels Alloys Pvt. Ltd. v. CCE, Ludhiana, 2008 (229) E.L.T. 607 (Tri.-Delhi), it was held that a manufacturer cannot be denied the credit on the ground that registered dealer had not received the inputs. The Tribunal in case of M/s. Lloyds Metal Engg. Co. v. CCE, Mumbai, 2004 (175) E.L.T. 132 (Tri.-Mumbai) has held that burden to prove non-receipt of the inputs is required to be discharged by Revenue by sufficient evidence. Where disputed consignments are entered in RG-23A Part I and Part II in chronological order, the allegations of nonreceipt of the inputs cannot be upheld. (iii) In view of the above, I find no justifiable reason to uphold the impugned order and the same is, accordingly set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iating the evidence on record has recorded that there is no evidence to reflect upon the fact that the inputs were not actually received by the assessee; there was no dispute that the LRs were issued by the transporter showing that the assessee is the consignee of the goods; the case of revenue was based on the goods registers maintained by the transporter which indicates the description of the goods as miscellaneous . According to the Tribunal, this fact, by itself, could not be held to be sufficient for arriving at the conclusion that the inputs were never transported to the assessee s factory. The Tribunal found as a matter of fact that all documentary evidence on record supported the assessee s case about the receipt of inputs, whereas there was no independent corroborative evidence produced on record by the revenue in support of its case. Raj Petroleum 2005(192) ELT 806:) --------- --------- ------- (ix) The notice seeks and subjects to rely on the statements of the 3 Directors of RPM along with the statements of the Production Supervisor (Anil Lad) and Chemists (Prakash Suryavanshi) as also the Manager (Dungar C. Chothani alias Kakubhai). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the various statutory registers and documents in anyway connived with the appellant. Neither is it the case of these Officers that they were misled in putting their signatures on various documents that indicate that the raw materials reached the appellant s factory, and were not diverted. In view of this voluminous documentary evidence read with the statements of the Excise Inspectors recorded under Section 14 of the Act, we are clearly of the view that the reliance placed by the CESTAT as well as the Revenue only on the oral statements of an estranged brother of one of the Directors of the appellant as well as the transporters of the suppliers (to come to the conclusion that the raw material - yarn had been diverted), was wholly erroneous and contrary to all well-known settled legal principles. It is now trite law that documentary evidence has far greater weightage against oral evidence especially when the oral evidence is contrary to the documentary evidence. This position in law is very well settled but if one needs to refer to any authority on the subject, it would be apposite to refer to a decision of the Privy Council in the case of Ramdhandas Jhajharia v. Ramkisondas Dalmia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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