Harish Vaman Shenvi vs Commissioner Of Central Excise, ...

[Arising out of Order-in- Appeal No. YDB/21 to 23/M-I/2012 dtd. 12/3/2012 passed by the Commissioner (Appeals) Central Excise Mumbai Zone I]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

Harish Vaman Shenvi M/s. Rashtriya Metal Industries Ltd. : Appellants

VS

Commissioner of Central Excise, Mumbai-I : Respondent

Appearance

Shri. S.S. Gupta, C.A. for the Appellants Shri. V.K. Shastri, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 5/5/2015 Date of decision: 5/5/2015

ORDER NO.

Per : Ramesh Nair

These two appeals are directed against Order-in- Appeal No. YDB/21 to 23/M-I/2012 dtd. 12/3/2012 passed by the Commissioner (Appeals) Central Excise Mumbai Zone I, wherein Order-in-Original No. 06/2011-12/MI/J.C. dated 30/6/2011 was upheld and appeals of the appellant as well as appeal filed by Revenue was rejected. The fact of the case is that the appellant, M/s. Rashtriya Metal Industries Ltd are engaged in the manufacture of copper, bronze and brass strips/foils etc. falling under Chapter 74 of the First Schedule to the Central Excise Tariff Act, 1985. They are also availing Cenvat credit facility in terms of Cenvat Credit Rules, 2004. DGCEI, Ahmadabad investigated the case and found that certain dealers manufacturers located in the state of Maharashtra are availing Cenvat Credit of the Counter Veiling duty paid on imported copper ingot/re-melted wire bar merely on the basis of Cenvatable invoices showing procurement of such goods in the warehouse/factory premises. Intelligence further suggested that goods in question were initially imported by certain concerns through ICD, Tughlakabad, Delhi (by way of High sea sale/purchase Transactions)on payment of applicable Customs duties and thereafter, such goods were sold/disposed off by them in the local market at Delhi; that the documents were reportedly prepared in such a manner so as to indicate that the goods were transported and delivered from the said ICD to premises of certain registered dealers or to manufacturers of finished goods located in and around Mumbai.

In further inquiry relating to the present case it was found that the goods were not transported from ICD Tughlakabad to Mumbai based registered dealer i.e. M/s. Nakoda Trading Corporation, Mumbai. Therefore it was concluded that since goods were not received by M/s. Nakoda Trading Corporation then there is no question of further supply of said goods to the appellant hence appellant is not entitled for Cenvat Credit. The show cause notice was issued denying Cenvat Credit of Rs. 9,66,356/- to the appellant which was purchased from M/s. Nakoda Trading Corporation. The show cause notice culminated into adjudication order wherein demand was confirmed and penalties were imposed. Aggrieved by the said order, appellant filed appeal before the Commissioner(Appeals). The appellant filed appeal challenging the original order and Revenue also filed appeal challenging portion of the order to the extent of confiscation of the goods was dropped by the adjudicating authority. Ld. Commissioner(Appeals) rejected the appeals of the present appellant as well as appeal filed by the Revenue. Aggrieved by the impugned order, appellants are before me.

2. Shri. S.S. Gupta, Ld. C.A. appeared on behalf of the appellants and submits that entire investigation has been carried out regarding transaction from ICD, Tughlakabad to their supplier M/s. Nakoda Trading Corporation. All the evidences which are gathered are related to non delivery of the goods from ICD, Tughlakabad to M/s. Nakoda Trading Corporation. However there is no any evidence to dispute supply of the goods by M/s. Nakoda Trading Corporation to the appellant. He submits that they have submitted all the records before adjudicating authority as well as before the Commissioner(Appeals) regarding transportation of the goods to their factory, receipt of the goods, payment of such supply, usage of the goods in production and the production of resultant goods. It is his submission that irrespective of the location that goods have not been transported from ICD Tughlakabad to M/s. Nakoda Trading Corporation but fact remains there is no dispute that the appellant has received inputs under the cover of registered dealers invoices. He submits that payment of such supply made through cheques therefore departments case is only establishing non-receipt of the goods by M/s. Nakoda Trading Corporation.

However supply of goods from M/s. Nakoda Trading Corporation to the appellant has not been inspected. On the contrary all the documents produced by them since the same were not held to be fake, bogus cannot be disputed. He submits that there is no findings of the lower authorities on the their undisputed documentary evidences regarding purchase, transportation, receipt of the goods, payment made their against use of the material in their production. He submits that lower authorities have relied upon statement of Shri. Ugamraj Jain, who stated that material was not delivered to the appellant. In this context appellant has sought for cross examination of Shri. Ugamraj Jain of M/s. Nakoda Trading Corporation on the ground that on the basis of their record it is not under dispute that they have received material from M/s. Nakoda Trading Corporation. In this situation, if an adverse statement was given by Shri. Ugamraj Jain, it is fit case that cross examination has to be allowed to examine that on the basis of the records that the material was supplied to the appellant and all the relevant documents are available his mere statement cannot negate the bunch of evidences which shows that material was received by the appellant.

He submits that by not allowing cross examination and not considering all the documents by the lower authority there is gross violation of principle of natural justice on the part of the adjudicating authority as well as first appellate authority. He therefore prayed that the matter be remanded to the original adjudicating authority to cross examine Shri. Ugamraj Jain and to consider their documents which shows that material has been received in their factory.

3. Shri. V.K. Shastri, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that it has been established by detailed investigation and admissions of various persons such as CHA, transporter, persons of M/s. Nakoda Trading Corporation that the material covered under bill of entry which was cleared from ICD Tughlakabad has not been received by the M/s. Nakoda Trading Corporation. Once it has been established that material has not been received by M/s. Nakoda Trading Corporation then it is obvious that the said material could not have been supplied to the appellant. He submits that material itself not been delivered to the M/s. Nakoda Trading Corporation then whether the material was further supplied to appellant or otherwise need not to be established, therefore lower authorities have correctly denied Cenvat credit in respect of goods which has not been delivered to the appellant. This fact is not under dispute, there is no purpose of cross examination and to examine the records of the appellant.

4. I have carefully considered the submissions made by both the sides and perused the record.

5. I find that from the investigation it has been proved that material which shown to have been cleared under the bill of entry have not been received by the M/s. Nakoda Trading Corporation. Therefore M/s. Nakoda Trading Corporation could not have passed on credit of CVD paid on material which has not been sold to appellant. However, it is observed that no much investigation has been carried out regarding supply of goods from M/s. Nakoda Trading Corporation to the appellant. The appellant has produced all the records to establish that irrespective of any discrepancy at stage of transportation of the goods from ICD Tughlakabad to their supplier but the appellant has received material may not be same material which was cleared from ICD Tughlakabad. Ld Counsels submission that irrespective whether M/s. Nakoda Trading Corporation has not received the material but the fact that material (may be some other) which has been supplied by M/s. Nakoda Trading Corporation to appellant has not been examined on the basis of records made available by appellant to the lower authorities. If the appellant has received material, statement of Shri. Ugamraj Jain, who stated that material has not been delivered to the appellant, his cross examination should be allowed.

I am therefore of the view that there is contradiction between entire facts as appeared from the records of the appellant and the facts stated by Shri. Ugamraj Jain, therefore cross examination should be allowed. The adjudicating authority as well as first appellate authority irrespective of any conclusion must consider the records of the appellant which was failed to do so. In view of the above discussions, I am of the view that adjudicating authority has violated principle of natural justice inasmuch as not considered request of the appellant for cross examination of Shri. Ugamraj Jain and also in not considering all the documents of the appellant. I therefore remand matter to the original adjudicating authority to allow cross examination and to consider records of appellant and pass a fresh order. I clearly state that adjudicating authority should not be influenced by any of my observations and should take independent view. All issues are kept open including limitation. Adjudicating authority expected to complete the denovo adjudication within a period of three months from the date of receipt of this order.

Appellants are directed to co-operate in the denovo adjudication process. Appeals are disposed of by way of remand to the original authority.

(Operative part pronounced in court)

Ramesh Nair Member (Judicial)

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