TMI Blog2024 (2) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... oss-examination is clearly unsustainable in legal parlance for the obvious reason that no adverse inference can be drawn against assessee where statements are to be relied by the Revenue without ascertaining the veracity in the absence of cross-examination. Therefore the said statements cannot be relied upon as admissible evidence in terms of the provisions of Section 9D of the Act. Reliance is placed on the ruling of the Hon ble Punjab Haryana High Court in the case of M/S JINDAL DRUGS PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND ANOTHER [ 2016 (6) TMI 956 - PUNJAB HARYANA HIGH COURT] wherein the Hon ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for cross-examination by the other side/assessee. Such view has also been affirmed by the Hon ble Supreme Court in the case of ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. RAJU Shri Ankur Upadhyay , Advocate for the Appellant Shri Ashok Thanvi , Assistant Commissioner ( AR ) for the Respondent ORDER RAMESH NAIR These appeals are filed by the Appellants against the impugned Order-In-Original No. 22/MP/VAPI/2011 dated 21.10.2011. 1.1 The brief facts of the case are that the Appellant is engaged in manufacture of articles of copper. An intelligence collected by the officers of DGCEI, Vapi indicated that Appellant were using non-duty paid scrap for the manufacture of their final products and in order to avail the Cenvat credit, they were obtaining duty paid invoices of different inputs and were wrongly availing Cenvat credit on the strength of such documents without actual receipts of the inputs against such documents. The intelligence indicated that since the duty paid raw-materials as shown in the duty paying documents were not physically received in their factory for being used by them in or in relation to manufacture of finished goods, the Cenvat credit in such cases was not admissible to them. Accordingly, the factory premises of the appellant was searched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be relied upon in the present case because the statements of transporters is not signed by the gazetted officer who recorded the said statement and thus the said statement does not have any evidentiary value and cannot be considered as evidence. Thus the whole case of the revenue which is based only on the statements of transporter is frivolous and does not hold any water. He placed reliance on the following judgments:- State Vs. Yakub Ahmed 2000(125)ELT 113(Bom.) Satpushp Steels (P) Ltd. Vs. CCE, Jaipur -2006(196)ELT 105 (Tri. Delhi) Coolwels Automobile Engineers Vs. CCE, New Delhi 2007(207)ELT 615 (Tri. Del.) 2.2 He also submits that the Ld. Adjudicating authority in gross violation of principle of natural justice have denied the cross-examination of the transporter to the appellant as the statements of the transporter is crucial and it is the only basis for making the allegation of divergence of inputs to Bhiwandi or Surat. Hence the statement of the transporter cannot be relied upon in the interest of the justice as the said statement has not been cross-examined. Further statement of the transporter is not corroborated with any other evidences thus de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory premises of Appellant. Further 2 consignment of copper ingots/ wire bars purchased from M/s Bhagwati Metal Works, Kathua, Jammu not entered Gujarat to reach the factory premises of Appellant. Revenue rely upon the statements of transporters and check post report. We find that the entire proceedings have been initiated on the basis of statements of transporter and Check Post report which have been solely relied to conclude that the appellant has not received the goods. The appellant in the course of adjudication have been consistently demanding cross-examination of the witnesses whose statements have been heavily relied upon by the Department. The appellants have pleaded that the goods on which credit have been availed were duly received by them and duly accounted for in the statutory records and that payments have been made through banking channels. It is the case of the appellant that Cenvat credit has been unjustifiably denied to them by the adjudicating authority merely on the basis of the statements of transporters and other persons whose cross-examination have not been allowed. No other evidence is available on record but the statements which too have not been allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purposes of proving the truth of the contents thereof. Reliance is placed on the ruling of the Hon ble Punjab Haryana High Court in the case of Jindal Drugs (Infra), 2016 (340) E.L.T. 67 (P H) wherein the Hon ble High Court laid down the detailed procedure, inter alia, providing for cross-examination of the witness of the Revenue by the Adjudicating Authority and thereafter, if the Adjudicating Authority is satisfied that the statement of the witness is admissible in evidence than the Adjudicating Authority is obligated to offer such witnesses for cross-examination by the other side/assessee. Such view has also been affirmed by the Hon ble Supreme Court in the case of Andaman Timber (Infra) - 2015 (324) E.L.T. 641 (S.C.) = 2017 (50) S.T.R. 93 (S.C.). 4.2 We further find that Hon ble Punjab Haryana High Court in the case of Sukhwant Singh - (1995) 3 SCC 367 has observed as under :- 8. It will be pertinent at this stage to refer to Section 138 of the Evidence Act which provides : 138. Order of examinations. - Witnesses shall be first examined-in-chief then (if the adverse party so desires) cross-examined, then (if the party calling him so desires) re-examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of statements of persons. 4.4 We also perused the statements recorded by the Senior Intelligence Officers of DGCEI, Regional Unit, Vapi. We observe that on two computer typed statements name of Senior Intelligence Officer is appearing and in one statement no name is appearing. Further, there is no signature of the Senior Intelligence officers in the copy of these statements. In this circumstance we agree with arguments of the Ld. Counsel that the said statements are not valid in law under Section 14 of the Central Excise Act, 1944. The statements recorded by the DGCEI are unsigned by any of DGCEI officers. Therefore, the statements cannot be relied upon and no demand sustainable on said unsigned Statements. 4.5 Without prejudice, we find that the Cenvat Credit Rules 2004, deal with the procedure relating to availment of credit. As per Rule 3, a manufacturer or a producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as Cenvat credit) of the duties specified therein paid on any inputs or capital goods and received by the manufacturer for use in or in relation to the manufacture of final products. Rule 4 of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors or employees to the effect that the raw materials were not actually received by them. There is also no admission in the said statements to the effect that raw materials stand diverted in the open market. Further no corroborative evidence produced by the department in relation to use of alternate raw materials when the disputed goods are not received by the appellant , how they procured the alternate goods which have been used in the manufacture of dutiable goods cleared on payment of duty. We find that the disputed goods were duly found to have recorded in the Appellant s factory and were consumed in the production. In such case we do not find any reason to disallow the credit to the Appellant. 4.7 We further find that that the allegation of cenvat credit wrongly availed on inputs without actual receipts of the goods in factory and without actually using the said goods in the manufacture of finished goods on the basis of records of transporter and their statements not sustainable. We find that the basis for denial of such substantial amount of Cenvat credit on raw materials is totally unsustainable and beyond reason. Here, again it is not clear, if such quantities of raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleging fraudulent availment of credit is not sustainable. 4.9 We also observe that 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 non-receipt of the inputs cannot be upheld. Further our above findings find support from the Tribunal s order in case of M/s. Ajay Industrial Corporation v. CCE, Delhi - 2009 (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 non-transportation 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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