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TMI Blog2023 (11) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... -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 Appeal No. 12670 of 2019-DB -- EXCISE Appeal No. 12671 of 2019-DB -- EXCISE Appeal No. 12672 of 2019-DB -- EXCISE Appeal No. 12673 of 2019-DB -E/CO/10137/2021 EXCISE Appeal No. 12674 of 2019-DB EXCISE Appeal No. 12675 of 2019-DB -E/CO/10136/2021 EXCISE Appeal No. 12676 of 2019-DB -E/CO/10135/2021 EXCISE Appeal No. 12677 of 2019-DB -E/CO/10150/2021 EXCISE Appeal No. 12678 of 2019-DB -- EXCISE Appeal No. 12679 of 2019-DB -- EXCISE Appeal No. 12680 of 2019-DB -- EXCISE Appeal No. 12681 of 2019-DB -E/CO/10116/2021 EXCISE Appeal No. 12682 of 2019-DB EXCISE Appeal No. 12683 of 2019-DB EXCISE Appeal No. 12684 of 2019-DB -E/CO/10117/2021 EXCISE Appeal No. 12685 of 2019-DB -- EXCISE Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AILBHAI 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, BAIJNATH MELARAM, JAI BAJRANGI SHIP BREAKERS PRIVATE LIMITED, BANSAL SHIPPING P LTD, DYNAMIC RECYCLERS P LTD, AKANSHA SHIP BREAKING P LTD, ASHWIN CORPORATION, BANSAL MARINE, SAUMIL IMPEX PRIVATE LIMITED, J K INDUSTRIES, MAHAVIR SHIP BREAKERS, SHRI SANJEEV PRATAPRAI SHETH, GURU ASHISH SHIP BREAKERS, PVR SHIP BREAKING COMPANY, SHRI SANDEEP RASHMIKANT RAJPURA, SHRI PRIYESH BHARABHAI PAREKH, HARI KRISHNA STEEL CORPORATION, SHANTAMANI ENTERPRISE, SHANTI SHIP BREAKERS PRIVATE LIMITED, PANCHVATI SHIP BREAKERS, SHRI NILESH HIMMATLAL THAKKAR, M V SHIP TRADE PRIVATE LIMITTED, SALASAR BALAJI SHIP BREAKING PRIVATE LTD, MARINE LINES SHIP BREAKERS PVT LIMITED, GK STEEL, MAHADEV STEEL INDUST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod 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 diverting the goods removed under the invoices issued by the ship-breaking units to other units - mainly re-rolling mills situated in or around Bhavnagar. 2.2 During the search of the office premise of Respondent, documents viz. purchase bills, freight vouchers, daily production report, note book, loose papers, loose weighment slips were seized. During the search at the factory premises of the Respondent, raw material viz. waste and scrap lying in stock in the factory premises of the Respondent was found and the photographs of such stock were also taken by the officers of department, which appeared to be local bazaar scrap and not one obtained from breaking of ship. 2.3 The officers of department thereafter reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 other tangible evidences which are absent is also not proper; adjudicating authority erred in not appreciating that the truck owners/authorised representatives in their statements have confessed that the name of drivers appearing in the freight vouchers who collected the inward transportation charges have never worked with them; that adjudicating authority has failed in noticing from the annexures to the show cause notice that in certain cases the person's name, who collected the transportation charges, have been changed though the vehicle number remains the same; adjudicating authority has not considered the fact that the owners of some of the vehicles have given name of specific units for which their trucks were plying inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the sales invoices more precisely (i) 729 invoices out of 842 covered in Annexure B1.1, (ii) 36 invoices out of 62 covered in B2.1 and (iii) 55 invoices out of 68 covered in B3.1 to the SCN, whereby upon perusing the respective invoices they had (i) agreed to the fact that the consignments have been diverted or were just paper transactions (ii) provided the names of re-rolling mills/furnace units to where the consignments were diverted (iii) even confirmed the details of cash transactions jotted down in the note book seized from the factory premises of M/s. Arsh Alloys. 3.9 The adjudicating authority erred in not considering certain important facts brought before him that no Chantiwala was engaged by Arsh Alloys as confirmed by S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 chotubhai temubha rana and shri vamanbhai kababhai were having any qualification or any working experiences to give any opinion about the nature of scrap found at the premises of the respondent; that photographs were taken but it was only visible inspection and no inspection regarding quantity and nature of the scrap was done. 4.2 The adjudicating authority has held that statements relied upon by the department are not supported by any tangible evidence; the adjudicating authority has formed an opinion under section 9D of the Act which has not been challenged by the department in the present appeal. As per section 9D of the Act, the examination-in-chief of the witnesses whose statements are recorded during investigation is to be done and if the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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-factory basis through brokers/buyers and transportation was therefore not responsibility of seller; price of such goods is received from the buyers by cheque; that once goods left premises at Alang yard, the ownership stands transferred to the buyers and sellers have no authority, interest or obligation in respect of the said goods. It was further submitted that they have been wrongly joined as co-noticee by way of addendum which cannot be treated as show cause Notice. None represented on behalf of 10 re-rolling mills/furnace mills. 5. We have carefully considered the submissions made by both the sides and perused the records. The present case involves the disputed quantity of inputs of 9.857 MTs waste and scrap purchased by the Respondent, Arsh Alloys from various shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments 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 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 scrap. (On the other hand, as can be seen from the statement of ship breakers, for instance M/s. G K Steel that information of transport and chantiwala are sent by the brokers. It appears from the statements of ship beakers that brokers manage significant part of the transaction between ship breakers and buyer of scrap. In that view no inference can be drawn on that basis to hold that inputs i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 third parties brought in support of their statements. He has held that statements of individual vehicle owners/authorized persons were recorded; no statement of driver of truck was recorded to ascertain truth of transportation of goods. He has further held that possibility of incorrect vehicle numbers/incorrectly mentioned in the invoice in respect of some of the cases cannot be ruled out given the nature of transport industry and that by itself is not enough to hold that goods were actually not delivered. It is settled law as laid down in decision of Commissioner Versus Motabhai Iron Steel Industries upheld by Hon'ble Gujarat High Court as reported in 2015 (316) ELT 374, that no reliance can be placed on statements of third party without tangible corroborative evidence. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suance 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 assessee has produced ample evidence in the shape of documentary record to reflect upon the fact that they had actually received the inputs from the first dealer and had made payments to them through Demand Draft. In any case, the fact of non-stamping of LR is only in respect of the goods received by the registered dealer. As rightly observed by the original adjudicating authority, the same would not reflect upon the fact of non-receipt of the inputs by the appellant from the dealer inasmuch as the dealer might have supplied the inputs obtained by him from other source. 9. In view of the above, set aside the impugned order of Commissioner (Appeals) and restore the order of original adjudicating authority and allow the Appeal Nos. E/686, 693/2009 with consequential relief to the appellants. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 aside and the Appeal Nos. E/802, 840, 925/2009 are allowed with consequential relief to the appellants." Upheld by Guj HC - 2012 (282) ELT 206 (Guj): "5. A perusal of the order passed by the adjudicating authority indicates that the officers at the check post had entered the receipt of copper ingots in their record. Thus, even the official records maintained at the check post indicate receipt of copper. Merely because in the record of the transporter, two types of LRs had been issued in respect of the goods carried/transported by M/s. Singal Road Carriers which indicated transportation of miscellaneous goods and the other which indicated transportation of copper ingots/wire brass, the Department has jumped to the conclusion that copper ingots had not actually been transported. Except for the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue 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). These statements cannot be read in isolation and when read in the context of the Gate Register and Lab Register as found above are not relevant for establishing clandestine removal. Force is found in this submission. As the documentary evidence does not establish clandestine removal, the oral statements based thereon, which travel beyond the documentary evidence have to be viewed with suspicion and in the event of a conflict, the documentary evidence should prevail; thereby when documentary evidence does not establish clandestine removal, the statements based thereon cannot prove [see R.P. Industries v. Collector, 1996 (82) E.L.T. 129]. Besides, these statements are qualified and conditional. The statements have to be read together and as a whole are not in part and pieces, when so read, the statements do not establish clandestine remova ..... X X X X Extracts X X X X X X X X Extracts X X X X
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