M/S Sunmet Industries vs Commissioners Of Central Excise

[ Arising out of OIA-CS/224-226/DMN/NDMN/2011-12 dtd 28.2.2012 Passed by Commissioners of Central Excise, Customs and Service Tax-DAMAN ]

1. M/s Sunmet Industries 2. Shri Rajendra Singh Bhati 3. Shri Ramesh B Jain - Appellant(s)

Vs.

Commissioners of Central Excise, - Respondent(s)

Customs and Service Tax-DAMAN

Represented by

For Assessee : Shri S J Vyas, Advocate For Revenue : Shri G P Thomas, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, Hon.ble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. H.K. Thakur, Hon.ble Member (Technical)

Date of Hearing / Decision : 15/6/2015

ORDER No. A/10824-10826/2015 dtd 15/62015

Per : Mr. H K Thakur;

These appeals have been filed by the appellants with respect to OIA dated 28.2.2012 under which OIO dated 21.3.2011 passed by the adjudicating Authority has been upheld. A demand of Rs 5,86,793/- has been confirmed against the main appellant M/s Summet Industries under Rule 14 of the Cenvat Credit Rules 2004 alongwith interest and a penalty of Rs 5,86,793/- has also been imposed upon the main appellant under Rule 15(2) of the Cenvat Credit Rule 2014 read with Section 11AC of the Central Excise Act 1954. Penalties of Rs 3 lac each has been imposed upon Shri R B Jain and Shri R S Bhati, Partner & Manager-cum-Authorised Signatory of the main appellant respectively, under the provisions of Rule 15(1) of the Cenvat Credit Rules 2004 and also Rule 26 of the Central Excise Rules 2002.

2. Shri S J Vyas, Advocate, appearing on behalf of the appellants argued that issue involved in these appeals is denial of Cenvat Credit to the main appellant for non-receipt of Copper Wire Rods sent on job work by following proper procedure. It was his case, that job worker in his statement has clearly mentioned that he is a regular job worker of the main appellant and has sent the finished goods back to the main appellant after doing the required job work. That the main appellant on receipt of goods has properly accounted for the same in the RG 1 account and cleared on payment of duty. That the only case is made by the Revenue on the basis of 2 statements of the transporters with respect to Challans wherein transporters have given statements that the inputs were not transferred to the job workers premises. The Learned Advocate argued that their request for cross examination of these witnesses was not allowed by the Adjudicating Authority which is not correct in view of the following case laws.

i) Motabhai Iron and steel Industries vs Commnr  2015(316)ELT.374(Guj)

ii) Mahek Glazes Pvt Ltd Vs UOI  2014(300)ELT.25(Guj)

iii) CCE, Ahmedabad II Vs Gujarat Cypromet Ltd  2013(7)TMI

iv) Slotco Steel Products Pvt Ltd vs CCE, Delhi I  2012(281)ELT.193 (Del)

v) J K Cigarettes Ltd Vs CCE., - 2009(242)ELT.189(Del.)

3. Learned Advocate therefore argued that statements of transporters could raise on a suspicion on the dispatch of materials but the same cannot be accepted as a complete evidence in the absence of any cross examination of those witness. That there is no evidence of shortage of raw materials or any seizer of raw materials diverted elsewhere.

4. Shri G P Thomas, Authorised Representative, appearing on behalf of the Revenue made the Bench go through the delivery Challans in the appeal memorandum and argued that no transportation documents have been furnished by the appellant to support their case that actually the goods were transported on payment of freight. It was, therefore, his case that the inputs were never sent for job work.

5. As a counter to the argument made by the Authorised Representative for Revenue, Learned Advocate appearing on behalf of the appellant made the Bench to go through the statement dated 27.1.2005 of the job worker and pointed out that as per answer to question No 14 of the statement, the inputs were regularly being supplied to the job worker which were sent back and recorded appropriately in the finished goods stock for discharging duty liability.

6. Heard both sides and perused the case records. The issue involved in the present appeal is whether certain inputs sent to the job workers were properly used or not. Revenue is of the view that only with respect to 2 delivery challans, the inputs were not sent to the job worker and could have been delivered elsewhere. The case of Revenue is based on the statements of two transporters. On the other hand, appellants have relied upon the statement of the job worker and the delivery challans under which the goods were received back by the appellant and accounted for in their finished goods stock. It is observed from the statement dated 27.1.2005 of Shri Sanjay S Mardia of M/s Nissan Copper Pvt Ltd that they are the job worker of the main appellant. He answered to question No. 14 of this statement that several consignments of inputs were received by the job worker and returned to the appellant after job work completion. Job worker has also received payments for the job work done though cheques. Further cross examination of the transporters was not allowed by the Adjudicating Authority. In the present factual matrix there is a conflict in the oral statement of the transporter and the other documentary evidence produced by the appellant. In this regard, Para 14 of the case of R P Industries vs CC, Ahmd  [1996(82)ELT.129(Trib)] is relevant and is reproduced below:

 14.When the main allegations as to unauthorised? importation is not sustainable, the role allegedly played by the other individuals cannot tantamount to attracting the provisions of Section 112 of the Act. Going by the series of the statements recorded and different versions given, same grounds may be available to suspect something unusual or coloured in the entire episode. The role played by Mr. R.K. Jain, as disclosed in the statement of R.P. Mehta as also the admissions of Mr. R.P. Mehta, as to his involvement, appears rather strange. However, the Tribunal has to adjudicate upon given set of documentary devidence, and to examine whether there is any violation of the Policy provisions, and whether, from the ITC angle, there is any contravention and here, notwithstanding any other things, the documents are clear enough to show that there has been no irregularity and that being the case, there is no option but to hold that penalty imposed on various parties is also not sustainable, The same are also set aside.

7. In view of the above, in a situation where there is a conflict between the oral evidence and the documentary evidence then preference is required to be given to the documentary evidence which has been done by the appellant in the form of delivery challans and accounting for the goods received for their job worker in the statutory records. Further, only evidence against the appellant is in the form of oral statement of the transporter which cannot be relied upon, when no cross examination of the witness was provided to the appellants in view of their request made before the lower authorities.

8. In view of the above observations, Cenvat Credit was correctly availed by the main appellant and accordingly all the appeals filed by the appellants are allowed.

(Dictated and pronounced in the Court)

(H.K. Thakur) Member (Technical)

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