CESTAT Ahmedabad held that documentary evidence has far greater weightage against oral evidence especially when the oral evidence is contrary to the documentary evidence. Accordingly, duty demand unsustained as statutory records duly reflects receipts and consumption of goods.
Facts- The Respondent Company M/s Shah Alloys Limited is engaged in manufacture of S.S. Billets/Ingots & HR/CR Coils/Plates/Sheets, Round /Flat Bars etc. Based on the search operation conducted at various premises and documents/records withdrawn and oral evidences from M/s Shah Alloys Limited and other concerned persons / parties, it was noticed by the investigation that Respondent is engaged in evasion of Central Excise Duty by way of availment of Cenvat Credit on the basis of the invoices issued by the dealers located in Mumbai and Pune without actual receipts of Cenvatable goods i.e. S.S. Pipes/ Sheets/Plates/Coils & S.S (duty paid) Scrap mentioned therein and further to substitute such non receipt of cenvatable goods i.e located in Mumbai and Pune without actual receipts of Cenvatable goods i.e S.S Pipes/Sheets/Plates /Coil or S.S. Secondary/Defective Pipes /Sheets /Plates /Coils & S.S (duty paid) Scrap, they were either directly purchasing/ receiving non duty paid S.S. local scraps (without covering of any legitimate documents) from various scrap suppliers based in Mumbai, Hyderabad, Bangalore, Chennai, etc. or have got arranged the same for them by the respective dealers.
Show cause notice was issued to M/s. Shah Alloys for disallowance and recovery of Cenvat Credit along with interest and penalty and also imposition of penalty on above respondents. In Adjudication, Commissioner vide impugned order dropped the proceedings initiated vide show cause notice. Hence, the Revenue filed these appeals against the order of the Ld. Commissioner.
Conclusion- Since the Revenue failed to prove alternative source of receipt of raw materials and also money flow back from manufacturer/supplier to the assessee, it cannot be said that they had not received the inputs especially when statements relied upon by the Revenue are contrary to the documentary evidence on record produced by the Respondent. Therefore, the finding of the Adjudicating authority on this issue has to be accepted. We also noticed that in the present case the reliance of third party documents /statements while conforming demand against present respondent is also observed to be unjustified and unreasonable.
Held that we found force is arguments of respondents that in case statements recorded by the Revenue officers were contrary to the information and detailed entered in the statutory records and other documents, then the documentary evidence carried higher evidentiary value compared to the oral statements. In the present matter as the documentary evidence does not establish non–receipts of goods and availment of Cenvat credit without receipts of the goods, 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. 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.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
1. These appeals are filed by the revenue against the common order-in- original No. AHM-EXCUS-003-COM-003-17-18 dated 20.09.2017. The details of the appeals are as follows :
|E/10102/2018||CCE & ST. Ahmedabad –III||M/s Shah Alloys Limited||Cenvat Credit of Rs. 19,09,76,410/- along with interest and penalty|
|E/10032/2022||CCE & ST. Ahmedabad –III||M/s Stainless International||Penalty|
|E/10033/2022||CCE & ST. Ahmedabad –III||M/s. Nayana Metal Corporation||Penalty|
|E/10034/2022||CCE & ST. Ahmedabad –III||M/s. Madhusudan Metals||Penalty|
|E/10035/2022||CCE & ST. Ahmedabad –III||M/s. Nakoda Ferromet||Penalty|
|E/10036/2022||CCE & ST. Ahmedabad –III||M/s. Goodluck Metal Corporation||Penalty|
|E/10037/2022||CCE & ST. Ahmedabad –III||M/s. Shree Sujal Shah||Penalty|
|E/10038/2022||CCE & ST. Ahmedabad –III||M/s. Shree Yash Stainless Pvt. Limited||Penalty|
|E/10039/2022||CCE & ST. Ahmedabad –III||M/s. Adarsh Stainless Pvt. Limited||Penalty|
|E/10040/2022||CCE & ST. Ahmedabad –III||M/s Dev Alloys||Penalty|
|E/10041/2022||CCE & ST. Ahmedabad –III||M/s. Ambika Metal Industries||Penalty|
|E/10042/2022||CCE & ST. Ahmedabad –III||M/s Manohar Manak Alloys||Penalty|
2. The brief facts of the case are that the Respondent Company M/s Shah Alloys Limited is engaged in manufacture of S.S. Billets/Ingots & HR/CR Coils/Plates/Sheets, Round /Flat Bars etc. Based on the search operation conducted on 18.12.2013 at various premises and documents/records withdrawn and oral evidences from M/s Shah Alloys Limited and other concerned persons / parties, it was noticed by the investigation that Respondent is engaged in evasion of Central Excise Duty by way of availment of Cenvat Credit on the basis of the invoices issued by the dealers located in Mumbai and Pune without actual receipts of Cenvatable goods i.e. S.S. Pipes/ Sheets/Plates/Coils & S.S (duty paid) Scrap mentioned therein and further to substitute such non receipt of cenvatable goods i.e located in Mumbai and Pune without actual receipts of Cenvatable goods i.e S.S Pipes/Sheets/Plates /Coil or S.S. Secondary/Defective Pipes /Sheets /Plates /Coils & S.S (duty paid) Scrap, they were either directly purchasing/ receiving non duty paid S.S. local scraps (without covering of any legitimate documents) from various scrap suppliers based in Mumbai, Hyderabad, Bangalore, Chennai, etc. or have got arranged the same for them by the respective dealers. Show cause notice dated 29-09-2015 was issued to M/s. Shah Alloys for disallowance and recovery of Cenvat Credit along with interest and penalty and also imposition of penalty on above respondents. In Adjudication, Ld .Commissioner vide impugned order dropped the proceedings initiated vide show cause notice dated 29.09.2015. Hence, the Revenue filed these appeals against the order of the Ld. Commissioner.
3. Learned Additional Commissioner Shri Prabhat K. Rameshwaram appearing on behalf of the Revenue reiterates the grounds of appeals. He submits that the adjudicating authority erred in considering the affidavits of the dealers/ transporters /scrap brokers retracting their confessional statements recorded by the investigating agency. Some of the statements were retracted at the adjudication stage, during the course of cross – examination, which appears to be after –thought only as it has not been made before the investigating officer. The investigating agency had intimated the adjudicating authority regarding non filing of the affidavits by the assessee and the co-noticees retracting their confessional statements. The adjudicating authority has erred in taking cognizance of such retractions by not considering the submission of the investigation agency. These type of retractions are not legal and cannot invalidate the statements recorded. He placed reliance on the decision in the case of D.M. Mehta & Bros Vs. Commissioner of Customs (General), Mumbai – 2017(346)ELT 477.
4. He also submits that the adjudicating authority has erred in holding that mere mention of different classification in dealers‟ invoices would not change the basic nature of the goods and description of goods mentioned in the dealer invoices viz., secondary or defective sheets / Pipes/ Plates or end cut piece are scrap and can be used as a recyclable stainless steel scrap by the assessee. As per the classification, the goods shown supplied by the dealers were prime goods having certain length /width and that goods cannot be treated as SS Scrap merely on the ground mentioned by the assessee that it is general trade practice to describe the goods by nomenclature like pipes or sheets or plates etc. when they are discarded or defective as such description would enable to identify the source of the scrap . The records recovered from M/s. Madhusudan Metal reveal that they have supplied turning scrap against the invoices of S.S. Pipes/Sheets / Coils etc. It need not be emphasized that S.S. pipes /Sheets/ Coils cannot be in the form of turning scrap.
5. He also submits that the adjudicating authority has emphasized on non-investigation of the financial accounts and other statutory records maintained by the assessee and the co-noticees to rebut the allegations in the SCN. However, the fact remains that these illegal activities of wrong availment of Cenvat credit are never recorded in their statutory records. But there are various evidence like booking registers, bills of scrap traders, incriminating details maintained by the dealer etc. recovered from the transporters/ scrap suppliers/ dealers which suggest that M/s Shah Alloys Limited had received SS Local scrap against the invoiced goods. Weighment slips recovered from M/s Shah Alloys Limited suggest the place of loading of the goods received by them against the cenvatable goods and on scrutiny of the same it is clear that the goods were received from various places other than that of the dealers. The adjudicating authority has simply brushed aside the evidence on the pretext of different dates shown in the weigh slip and dealer invoices and the nature of goods not mentioned in the weigh slip. The Adjudicating authority has failed to appreciate the facts that the purpose of weight Slips is to ascertain the quantity of the goods rather than the nature of goods. The fact that the same vehicle number as well as same quantity is reflected in both the documents attached together, which were recovered from the assessee’s premises, has not been given due consideration by the adjudicating authority.
6. He argued that the adjudicating authority has erred in refuting the evidence recovered from Shri Sachin Bhandari, M/s Nova Steel Limited, investigation conducted by recording the statements of Shri Schin Bhandari, M/s Nova Steel, Hyderabad clearly suggest that Shri Sachin Bhandari had supplied SS Scrap to M/s Shah Alloys Limited through the dealers viz. M/s Ambika Metal Inds. & M/s Nayana Metal Corp. These facts have been corroborated by evidence available in the file marked as A/11 recovered from M/s Ambika Metal Inds. The said file contain the details of scrap procured from scrap traders including Shri Sachin Bhandari of M/s Nova Steel, Hyderabad which were supplied to the assessee against the cenvatable invoices of M/s. Ambika Metal Industries/ Nayana Metal Corporation. All these are concrete corroborative evidence to the facts admitted by the Shri Sachin Bhandari in his statement dated 18.12.2013 apart from the fact that similar supplies have also been made to the assessee through M/s. Ambika Metal or M/s. Nayana Metal Corp. in cash are reflected in the diaries recovered from M/s. Ambika Metal and available in file marked as A/12. The adjudicating authority has refuted this piece of evidence on the ground that the bill books does not contain the details of the assessee and that there is overwriting of vehicle number on the bill book seized from M/s. Nova Steel. However, the fact that the details available in the bill book can be correlated with the invoices issued by the dealer and the fact that goods were supplied to the assessee through these dealers, which stands admitted by Shri Sachin Bhandari in his statement that has not been retracted, are critical corroborative evidence which cannot be ignored on flimsy ground mentioned by the adjudicating authority.
7. He also argued that documents recovered from M/s Shah Alloys Limited are vital evidence corroborating the confessional statements recorded by the investigating agency, which the adjudicating authority has failed to examine thoroughly. The adjudicating authority has grossly erred in rebutting the investigation held at the transporter’s end. The documents recovered from the transporter M/s. Suvidha Cargo Movers, M/s Moongipa Roadways Pvt. Limited, M/s. Sainath Roadlines, M/s. Chakreshwar Transport, M/s. Rajdhani Haryana Roadways (Pune), M/s. Shree Ganesh Transport and submission of M/s. V.A. Transport, M/s Geetanjali Roadways, M/s Pune – Latur Roadlines & M/s. Karnavati Transport Co. suggest that they had transported S.S. Scrap from various places to M/s Shah Alloys Limited but not from the premises of dealers. There are various LRs and Memos, particularly of M/s V.A Transport, showing the transportation of SS Scrap from M/s Nova Steels, Hyderabad to M/s Shah Alloys Limited and bearing the same vehicle numbers which are shown to the cenvatable invoices of the dealers like M/s. Manohar Manak Alloys Limited, Mumbai, M/s. Ambika Metal Industries and M/s. Nayana Metal Corporation which proves the modus operandi adopted by M/s Shah Alloys Limited The adjudicating authority has not thoroughly examined the said records which had been maintained by the transporters on actual basis.
8. He further submits that the adjudicating authority has held that there were no evidences regarding enroute replacement of the goods which is incorrect as this was not alleged in the SCN itself. It was alleged in the SCN that M/s Shah Alloys Limited had procured non-duty paid goods from scrap traders situated all over India against the cenvatable goods. The adjudicating authority’s observation that the investigation was not extended to the supplier of scrap is not correct as investigation were conducted at M/s Nova Steel, Hyderabad and M/s Megha Trading Corporation, Hyderabad etc. who are local scrap traders who have confirmed the supply of scrap to the assessee through the dealers based at Mumbai. Both Shri Sachin Bhandari and Shri Gopal Agarwal have not retracted their statements. All such scrap traders in their respective statements have deposed that they had supplied SS non-duty paid scrap to M/s. Shah Alloys Limited through the dealers and has not refuted such supplies to the dealers by them during the cross examination. M/s Manohar Manak Alloys Limited have admitted procurement of SS Scrap from such scrap traders during the cross examination.
9. He also submits that the judgments cited by the adjudicating authority mainly harps on requirement of documentary evidence apart from oral evidence to prove the offence. The said citations can be distinguished in the present case as there is sufficient incriminating and tangible evidence on records which corroborative the confessional statements of the assessee and the co-noticees to prove that fraudulent availment of Cenvat Credit.
10. He placed reliance on the following judgments:
(i) M/s. Amar Ispat Pvt. Limited & Others vs. CCE, Thane –I -2016-TIOL-845-CESTAT –
(ii) M/s. Agarwal Metal & Alloys Unit-II vs. CCE &ST Vapi- 2016(336) ELT A130
(iii) M/s. Shree Parvati Metals vs. CCE, Jaipur-I- 2016-TIOL-1108-CESTAT-Del,
(iv) M/s. Bhagwati Steelcast Limited & Ors. vs. CCE, Nashik -2012-TIOL-1257-CESTAT-Mum,
(v) M/s. MITC Rolling Mills Pvt. Limited vs. CCE, Nasik -2016-TIOL-1711-CESTAT-MUM
(vi) M/s. Besco Limited vs. CCE, Calcutta –I – 2001 (137) ELT 168
(vii) M/s. Facor Steel Limited vs. CCE, Nagpur -2014(314)ELT 593
(viii) M/s. Chandra Cement Limited -2017-TIOL-150-CESTAT –DEL
(ix) M/s. Steel Abrasives – 2017-TIOL-174-CESTAT –DEL
(x) M/s. Steel India Company vs. CCE, Pune –II – 2014(310)ELT 184 (T)
(xi) M/s. A.N. Guha & Co. vs. Collector -1996(86)ELT 333
Post hearing, the learned AR has filed written submissions dated 21.08.2023 and the same is taken on record and considered. In the written submissions, he relied upon the following judgments:-
(a) 2004 (172) ELT 433 (SC) – CC, Kandla vs. Essar Oil Limited
(b) 2006 (202) ELT 561 (SC) -Ispat Industries Limited vs. CC, Mumbai
(c) 2005 (184) ELT 263 (Tri-Bang) Gulabchand Silk Mills P Limited vs. CCE, Hyderabad-ii
(d) 2004 (165) ELT 136 (SC) – CCE, Madras vs. Systems & Components P Ltd
(e) 2007 (208 ELT 536 (Tri-Ahmd) – Montex Dyg & Ptg Works vs. CCE, Surat-1
(f) 2009 (248) ELT 242 (Tri-Mum) – Agrawal Overseas Corporation vs. CC, (EP), Mumbai
(g) 2009 (233) ELT 157 SCv- Vinod Solanki vs. Union of India
(h) 2016 (340) ELT 521 (Tri-Del) – CCE, Chandigarh vs. Vinay Traders
(i) 2013 (295) ELT 116 (Tri-Bang) – Ramachandra Rexins Pvt Limited vs. CCE, Bangalore-l
(j) 2017 (355) ELT 451 (Tri-Del) – Haryana Steel & Alloys Limited vs. CCE, New Delhi
(k) 2013 (297) ELT 561 (Tri-Chennai) – Lawn Textile Mills P. Limited vs. CCE, Salem
(l) 2013 (289) ELT 3 (SC) – Telestar Travels P Limited vs. Special Director of Enforcement
(m) 2015 (318) ELT 437 (Tri-Mum) P B Nair C& F P Limited vs. CC, (General), Mumbai
(n) 2016 (333) ELT 256 (Del) – Rajesh Kumar vs. CESTAT
(o) 1983 (13) ELT 1486 (SC) Kanungo & Co vs. CC, Calcutta & Others
(p) 2018 (15) GSTL 298 (Tri-Bang) Paragon Steels P Limited vs. CCE, Calicut
(q) 2017 (347) ELT 413 (Bom.) – Sharad Ramdas Sangle vs. CCE, Aurangabad
(r) 2011 (269) ELT 485 (AP)-Shalini Steel Pvt Limited vs. CCE, Hyderabad
(s) 2018 (360) ELT 255 (AP) – Manidhari Stainless Wire P Limited vs. Union of India
(t) 2010 (255) ELT 68 (HP)- CCE vs. International Cylinders P. Limited
11. Shri P.M. Dave, Shri Stebin Mathew, Shri M.L. Grover Advocates appearing on behalf of appellants reiterated the finding of the learned Commissioner.
12. Shri Dave in respect of appeal of M/s Shah Alloys Limited submits that the main ground in the revenue‟s appeal is that the adjudicating authority erred in considering the affidavits of the dealers/ transporters/scrap brokers retracting their confessional statements recorded by the investigating agency, and the adjudicating authority also erred in considering the retractions during the cross-examination of such persons. The ground raised is that such affidavits and also the deposition before the Commissioner during their examination were an after –thought. However it is a settled legal position that a statement made before an authorized Central Excise officer during the course of any enquiry was relevant for the purpose of providing the truth of the facts contained in the statement when such person was examined as a witness and the circumstance of the case, that the statement should be admitted in evidence. Section 9D of the Central Excise Act, 1994 lays down this mandatory conditions, and therefore there was no error by the Commissioner in calling the persons whose statements were recorded by the DGCEI for their examination and in concluding that the statements recorded by the DGCEI authority were not admissible as evidence, but the deposition by such persons in adjudication proceedings were truthful and genuine. He placed reliance on the following decisions:-
(i) M/s Jindal Drugs Pvt. Limited vs. Union of India 2016(340) ELT 67 (P&H)
(ii) Mansa Cigarettes Pvt. Limited vs. CCE & ST., Vadodara-I- Final Order No. A/11434-11439/2019
(iii) M/s J M Copper vs. CCE & ST, Rajkot – Final Order No. A/10594105/2019
(iv) J. P Iscon Pvt. Limited vs. CCE, Ahd-I -2022(63)GSTL 64 (Tri. Ahmd.)
(V) Forward Resources Pvt. Limited vs. CCE & ST, Surat –I -2023 (69) GSTL 76 (Tri. Ahmd.)
(vi) Shri Hari Steel & Others vs. CCE & ST., Rajkot -2022 (8) TMI 1251-CESTAT AHMEDABAD.
(vii) Arya Fibers Pvt. Limited vs. CCE Ahmd – 2014 (311) ELT 529 (Tri. Ahmd)
13. He also submits that another major ground raised in the Revenue’s appeal is that statements recorded by the investigating officers carried higher evidentiary value, and the records maintained by the registered dealers as well as by the respondent company in respect of sale, supply and delivery of duty paid inputs by the dealers and receiving and recording such duty paid inputs in private records as well as statutory records like RG-23A & B by the Respondent could not have been considered as relevant evidence by the Adjudicating authority. However, it is settled legal position that in case statements recorded by the revenue officers were contrary to the information and details entered in the statutory records and other documents, then the documentary evidence carried higher evidentiary value compared to oral statements. He placed reliance on the following decisions:-
(i) Raj Petroleum Products – 2005(192)ELT 806.
(ii) Al-Futtaim Engineering – 2007 (219) ELT 490.
(iii) Tex- Age – 2008(221)ELT 395.
(iv) Manish Kumar Jain – 2008(229)ELT 266
(v) Nissan Copper Pvt. Limited – 2014 (303)ELT 449
14. He argued that while issuing the show cause notice and also while filing the present appeal, the revenue has not disputed the facts that the respondent has, as a registered manufacturer of excisable goods, maintained Central Excise Records including Cenvat Registrar in form RG-23A at the factory. All the transactions of receiving inputs involving the above disputed cenvat credit have been recorded in the Respondent’s Cenvat Register at the factory. Further issue and utilization of such inputs for manufacture of respondent’s final products have also been recorded in the Respondent’s Cenvat registers as well as factory records. It is also not in dispute that inputs have been purchased and received from registered dealers who have issued invoices as dealers in the Respondent’s favour for sale and delivery of the inputs. The registered dealers have maintained the Cenvat Register in form RG-23 D, and the procurement of duty paid inputs by them from their supplier and the re-sale of such duty paid materials to the Respondent have been recorded in RG-23D; and these dealers have also submitted quarterly returns/ reports to their Range/ Divisional Officers reporting to them the details of such transactions. Respondent has also submitted on monthly basis, before the Range and Divisional Officers, all details of receiving cenvatable inputs and availment of cenvat credit thereon, and also the details of utilization of such inputs as well as Cenvat credit in respect of final products manufactured and cleared from their factory. The Range and Divisional officers in charge of the registered dealer’s premises and also in charge of the Respondent’s factory have verified, scrutinized and assessed all such returns and reports without any objection of whatsoever nature, and such assessments stand finalized and concluded in law.
15. He also argued that the price of these inputs purchased by Respondent has been paid by cheques; i.e. through normal banking channel; and such payment made by the Respondent are recorded in the Respondent’s audited books of accounts, whereas the payments received by the registered dealers have also been recorded in books of accounts including ledger of registered dealers, which have also been audited by their auditor. Further, services of various transporters were utilized by the registered dealers for transporting and delivering duty paid inputs to the Respondent’s factory, and payment of freight i.e transportation charges has also been made to the transporters by the registered dealers in accordance with the rate /amount of freight for transporting such goods from the premises /godowns of the dealers to the Respondent’s factory located at village Santej in Gandhinagar District. Appropriate amount of taxes like sales tax /VAT and Income Tax also been paid by the registered dealers as well as by the Respondent in respect of the above transactions. Since the above all facts are not disputed in the present proceedings, and the Revenue’s case about wrong availment of Cenvat credit is contrary to such facts, the Revenue’s case does not deserve any consideration.
16. He also submits that the registered dealers have filed replies to the show cause notice because personal penalty was proposed to be imposed on them also. In the reply and submission of the registered dealers in adjudication proceeding, all the registered dealers have taken a clear and unequivocal stand that they have sold and delivered to Respondent company duty paid raw materials and inputs. The registered dealers have also submitted documentary evidence including their RG-23D and ledger in the adjudicating proceedings, and it comes out clearly from these documents also that the transactions of sale and delivery of duty paid inputs between them and Respondent Company have been genuine and bonafide. The detail like quantity of goods, excise duty paid on such goods, the party from whom such goods were procured and the date of purchase of as well as the invoices for such goods evidencing payment of excise duty for all transaction have been recorded in the dealer’s RG 23-D as regards their purchases and procurements; and the detail of quantities of such duty paid goods sold by them to Respondent company including the invoice number and date, quantity of such duty paid goods sold under the invoice, amount of excise duty i.e. Cenvat passed on by the registered dealers to Respondent company. etc. are also shown in the RG-23D Register on sale side. Thus a complete co-relation between purchase/ procurement of duty paid goods by the registered dealer and sale/ delivery of such materials is found recorded in the statutory RG-23D Register; and these details therefore nullify the Revenue’s case that the Registered dealers have actually not sold and delivered duty paid goods to the Respondent company.
17. He also submits that when all the dealers have unanimously complained about the ill-treatment given to them by the investigating officers and when the correct facts explained by the them during their cross-examination are duly corroborated by the details recorded in their RG-23D as well as their Bank Accounts and Ledger, the statements recorded by the DGCEI Authorities cannot be relied upon. The correct facts are clarified by the registered dealers, and it becomes clear therefrom that the registered dealers have sold and delivered duty paid inputs to the Respondent Company.
18. He also argued that the revenue case is flimsy because the transporters have never stated that the goods transported by them were not duty paid, and also because the transporter would not ever know whether the goods loaded in their truck were duty paid or not. The transporter may also not know what was the material loaded in their truck because they are paid for the weight of the goods and the distance of transportation, and not on the basis of the nature of the goods loaded. A few transporters like Shri Ramnivas Sharma (M/s. Mongia Roadways Pvt. Limited), Shri Pritam Sharma (Hanuman Freight carriage), Shri R.G. Joshi (M/s Karnavati Transport Company), Shri Mukesh T. Mistri (Super Roadways), Shri Chander T. Matta (Tulsa Motor Transport) have also been cross- examined, and such representative of various transporters have clarified that the detail in their LRs were correct, and that they had never informed the investigating officers that the loading places were different from the details shown in the LRs. These transporters have also clarified that they only arranged for truck and not for loading and that the party (i.e. dealer) whose goods were loaded in the truck was responsible for taking truck to their place and loading of their goods in the trucks. Many of the transporters have also clarified that they did not know the difference between steel scrap and CRSS Coils/Sheets/ Plates /Pipes, and also that they were not concerned about the nature of the goods because the payment to them was on weight basis. Some of the transporters have also confirmed that steel scrap was delivered by them to the Respondent’s factory. None of the transporter has stated that duty paid goods loaded in their truck were replaced or changed enroute, or that some other goods were loaded in the truck after removing the duty paid scrap which were transported by the registered dealers in such trucks. On the contrary the details of LRs are confirmed by the transporters , and therefore it is clear from the transporter’s evidence also that duty paid SS Scrap, which was sold to the Respondent by the registered dealers at whose instance such scrap was loaded in the truck of such transporters, was delivered to the Respondent’s Santej Factory. The revenue has not found even a single instance where transportation charges paid by the registered dealer to the transporter was not in accordance with the distance involving the dealers places and Respondent’s Santej factory. The evidence of payment of transportation charges thus also proves that the goods which were loaded by the registered dealers were delivered to the Respondent’s Santej factory, and nowhere else The availment of Cenvat Credit for such scrap was therefore perfectly legal and valid.
19. He also submits that the details taken by the officers from the records of the weigh bridge however show the time and date when tare weight was taken and when gross weight was taken. A simple perusal of such details of weigh bridges shows that there was a difference of a few hours between the two; some time the difference being that of 6 to 8 hours. However if a bridge was located at Sion in Mumbai, then, a truck could travel a long distance and come back after loading for gross weight during 6 to 8 hours. How could the revenue allege that goods may have been loaded from a premises located in a close neighborhood of the weigh bridge when 6 to 8 hours were taken for loading the goods, because the truck could have gone to a long distance up to Thane or Bhiwandi or any other place also during such a long time for loading of duty paid scrap from any godown situated at such places. It was possible for a registered dealer to take the truck to a little distance place where his godown and warehouse was located for loading the duty paid inputs, and then the loaded truck may have been brought back to the weigh bridge for gross weight. The location of the weight bridge is therefore not a factor relevant for deciding whether duty paid scrap was loaded in the truck and all the goods loaded were non-duty paid goods. The registered dealers have given details of their godowns from where duty paid scrap was loaded, and it is clear from their statements that many of the dealers thus had their godown, warehouse and storage facilities at various places, it was obvious that duty paid scrap materials were loaded in the truck hired by them from any of such premises. The revenue has not brought on records from which godown or storage facility the goods were loaded in a particular truck which was weighed at a particular weigh bridge.
20. He further argued that the Cenvat credit proposed to be disallowed was taken and utilized during the September 2010 to 18.12.2013, but the show cause notice is issued on 29.09.2015; and thus larger period of limitation is invoked in this case. The Revenue and Divisional officers In-charge of Respondent’s factory have not found anything irregular or illegal while verifying the Respondent’s records and register and also while accepting the Respondent’s monthly returns during the long period of September, 2010 to December 2013, and even while accepting the Respondent’s return with the details of input received and availment of Cenvat Credit, the Range and Divisional officers have never suggested that full facts about such transactions were not disclosed, or the details disclosed were false or incorrect. Moreover, admittedly, all the transactions for which Cenvat credit is disputed have been recorded in the Respondent’s Cenvat Register, and availment of Cenvat credit for such inputs is also recorded in RG-23A Part-II as well as Returns. It is also an undisputable facts that such goods were procured by the registered dealers from several established suppliers, and that such goods were always procured by the registered dealers on payment of excise duties. Thus, the goods procured by registered dealers and sold to the respondent have been undisputedly duty paid, and therefore the description of the goods in the invoice is not a factor for which any allegation of contravention of the Cenvat Credit Rules or suppression of facts could be validly made against the Respondent. The utilization of the inputs for manufacture of the Respondent’s final products removed on payment of excise duty is also recorded in statutory registers including RG-1 and ER-1 returns, and thus there is no suppression of facts by the Respondent as regards receiving and utilizing the input also. Clearly, in the present matter demand is time bar.
21. We have heard both the sides and perused the records. We have carefully gone through the records, grounds of appeals and submissions of parties and finding of the impugned order and various case laws cited by both the parties. We find that the case of the department is that M/s Shah Alloys availed the Cenvat credit on the strength of invoices issued by the registered dealers without actual receipts of the goods. During the search officers seized 11.00MT of S.S. Old & used utensil scrap in reasonable doubt that said goods was substitution of the goods i.e. defective S.S. C.R Sheet mentioned in the invoice No. 58 dated 11.11.12 issued by the M/s Nayana Metals Corp. Subsequently, search was conducted in various places that were related to non-duty paid scrap dealers, transporters and registered dealers. Oral statements of various persons were also recorded. After the detailed investigation it has been proposed in the show cause notice by department that respondent had availed inadmissible cenvat credit of Rs. 19,09,76,410/- on the strength of the invoices issued by the registered dealer, without actual receipt of duty paid goods and as the same were replaced by non-duty paid scrap purchased from the local market in cash, by these dealers. Accordingly two show cause notices i.e one for seizure portion and another for recovery of inadmissible cenvat credit were issued. As regard the seizure issue appeals of the respondent was allowed by the Commissioner (Appeals) vide Order-In-Appeal No. AHM-EXCUS-003-APP-019-16-17 dated 25.05.2016. Ld. Commissioner (Appeals), held that scrap was that of defective S.S. CR Sheet in bundle matching with corresponding invoice. Further, it is on record that the said order of Commissioner (Appeals) has been accepted by the department. In these circumstance we do not agree with the arguments of the revenue that respondents have received the replaced goods to take fraudulent cenvat credit. We observed that many of the witnesses like the dealers‟ representatives, transporter’s representative and the weigh-bridge operators etc. were cross examined before the Learned Commissioner and all the witnesses clarified that the transactions that they were involved in were true and genuine. We also find that mere statement is not sufficient to establish charge of fraudulent Cenvat credit. Whether the goods were physically received or otherwise by the respondent is a positive act, which must be proved with tangible evidence beyond any doubt and not with circumstantial evidences. In the present case charge of non-receipt of goods was made against the respondent. The Learned adjudicating authority in the present matter rightly held that Cenvat demand is not sustainable merely based on the oral statements without corroborative evidence.
22. We also find that in present matter grievance of the revenue is that the adjudicating authority has erred in considering the affidavit of dealers/ transports /scrap brokers retracting their confessional statements recorded by the investigating agency and some statements were retraced at the adjudication stage, during the course of cross-examination, which appears to be after –thoughts. We find that the Hon’ble High Court of Delhi in the case of CCE, Delhi-I Vishnu & Co. [2016 (332) E.L.T. 793 (Del.)], while dwelling upon the „reliability of statement‟ has held that “Once it is shown that the maker of such statement has in fact resiled from it, even if it is after a period of time, then it is no longer safe to rely upon it as a substantive piece of evidence. The question is not so much as to admissibility of such statement as such as it is about its ‘reliability’. It is latter requirement that warrants a judicial authority to seek, as a rule of prudence, some corroboration of such retracted statement by some reliable independent material. This approach is adopted by the CESTAT and the Court finds it to be in consonance with the settled legal position in this regard.”
23. We find that learned adjudicating authority rightly cross-examined witness before considering their statements as relevant as required under Section 9D of the Central Excise Act 1944 in the course of the adjudication proceedings. In Agrawal Round Rolling Mills Limited, 2015 (317) E.L.T. 145 (T), the Tribunal has held that the Adjudicating Authority, in accordance with the provisions of Section 9D(2) of the Central Excise Act, 1944 must examine the witnesses whose statements have been relied upon by the Department and thereafter must permit their cross-examination by the appellant. In the case of Tejwal Dyestuff Industries, 2007 (216) E.L.T. 310 (T), the Tribunal has held as under :-
“Recording of the confessional statement would not put an end to the investigation and the Revenue Officers should be careful to ensure that they are not tricked out of a regular and detailed investigation by making strategic confessions which are retracted by preparing affidavits soon after they are made and which affidavits are again strategically withheld from the Revenue Officers, so that they become complacent and do not carry out a fuller investigation. It appears that the Revenue Officers in the present case have fallen victim to this type of strategic confessional statements which have been retracted soon after they were made in the affidavits which were withheld by the deponents till the proceedings came up before the Commissioner, by which time the damage of not a making fuller investigation, thinking that the confessional statements are made and not retracted, was already done.”
The Hon’ble Supreme Court in MohteshamMohd. Ismail, 2007 (220) E.L.T. 3 (S.C.) = 2009 (13) S.T.R. 433 (S.C.), held that confession of a co-accused person cannot be treated as substantive evidence while observing in Para 16 of the said judgment as under :-
“We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvananthapuram [2006 (13) SCALE 386], this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is furthermore now well-settled that the court must seek corroboration of the purported confession from independent sources.”
In the case of Vinod Solanki, 2009 (233) E.L.T. 157 (S.C.) = 2009 (13) S.T.R. 337 (S.C.) the Hon’ble Supreme Court has inter alia held that the burden to prove that confession was voluntary is on the department. Court must bear in mind the time of retraction, nature and manner and other relevant factors to arrive at a finding.
In such situation, the retractions cannot be discarded. We are therefore of the view that statements which were retracted cannot be accepted as evidence and therefore there was no error by the Ld. Adjudicating authority considering the affidavits of the dealers /transporter/ scrap brokers retracting their confessional statements and in calling the persons whose statements were recorded by the DGCEI for their cross-examinations.
24. We find that the main issue to be decided is as to whether the respondent have correctly availed of the Cenvat credit of duty based on the invoices issued by their raw material / inputs suppliers i.e. registered dealers. In this context 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 said Rule stipulates that Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Rule 9 of Cenvat Credit Rules, 2004 deals with the documents and accounts on the basis of which the Cenvat credit can be taken and this includes an invoice issued by a manufacturer, an importer, a first stage dealer or second stage dealer. Sub-rule (2) further stipulates that no Cenvat credit shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994 are contained in the said document. In case any particulars are missing, Cenvat credit may be taken only with the prior approval of the jurisdictional Asst./Dy. Commissioner of Central Excise, if he is satisfied that the goods or service covered by the document have been received and accounted for in the books of account of the receiver. Sub-rule (4) of the said rule further stipulates that the Cenvat credit in respect of input or capital goods purchased from a first stage dealer or second stage dealer shall be allowed only if such first stage dealer or second stage dealer, as the case may be, has maintained records indicating the fact that the input or capital goods was supplied from the stock on which duty was paid by the producer of such input or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him. Sub-rule (5) further stipulates that the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacturer or provider of output service taking such credit.
25. From the above provisions of law, it becomes evident that to avail Cenvat credit, the inputs or capital goods should have suffered the excise duty paid by the producer/manufacturer of such goods and the goods should be received by the manufacturer availing credit in his factory and the inputs or capital goods so received should be utilized in or in relation to the manufacture of final products. In respect of inputs received from a first or second stage dealer, an additional condition is stipulated to the effect that the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such goods and only an amount of such duty on pro rata basis has been indicated in the invoices issued by him. It is further stipulated that the burden of proof regarding admissibility to Cenvat credit shall lie upon the manufacturer taking such credit. further stipulated that a manufacturer/producer taking Cenvat credit on inputs or capital goods shall take all reasonable steps to ensure that the inputs or capital goods in respect of which he has taken Cenvat credit are goods on which appropriate duty of excise, as indicated in the document accompanying the goods, has been paid.
26. We find that the case of the department is that respondent has availed the Cenvat credit on registered dealers’ invoices without receipts of the duty paid goods mentioned in dealers’ invoices and further to substitute such non –receipts of cenvatable goods , they have either directly purchased or received non-duty paid goods. We find that the conditions for allowing the Cenvat credit on the inputs used for manufacturing excisable goods are stipulated in Cenvat Credit Rules,2004 and similarly the documents on which the Cenvat Credit to be allowed has also been well defined in Rule 9 of Cenvat Credit Rules 2004. What is required to be established, only receipt of the inputs in the factory under cover of valid duty-paying documents and utilization of the goods in the manufacture of the final products cleared on payment of duty. On perusal of the records and facts of the case we find that in the present case it is admitted fact that the respondent shown the receipts of duty paid goods purchased from the registered dealers and use of the goods in their factory. Further such goods sold to the respondent by the dealers were also recorded in respective dealers statutory records i.e. RG-23D register, therefore we do not find any reason for disallowance of Cenvat credit in this matter specifically when the supplier of the goods/ raw material, nowhere admitted that, they have not supplied the goods to the respondent and in absence of any evidences in relation to diversion of disputed raw materials either by the dealers or respondent. When the inputs are used in the manufacture of dutiable final products, the benefit of Cenvat credit in respect of such input cannot be denied.
27. Examining the present issue, we find that there is no other evidences on record to show that the respondent either did not receive the raw materials, on which they have taken the credit or after receiving the same and availing the credit, the same stand removed by them in the open market. Further on the consideration of combined versions of statements and retractions thereof either in the affidavits or in the cross examination, in the entire case there is no admission in the of Respondent’s directors or employees to the effect that the raw materials were not actually received by them. There is also no admission to the effect that raw materials was diverted in the open market. We further take note of the fact that no efforts were made by the Revenue to ascertain the fact whether the dealers of the goods have actually been received the goods or it is merely paper transactions to the goods cleared by the manufacturer to the dealers. Further as per the revenue’s allegation that when the goods are cleared by the registered dealers, goods have not been received by the respondent premises, how they procured the goods which have been used in the manufacture of dutiable goods cleared on payment of duty. We find that the goods were duly found to have been recorded in the Respondent’s factory and were consumed in the production. Further goods also found recorded in registered dealers’ records. The payment was made through banking channels to dealers and transporters which is not denied. Most importantly, registered dealers nowhere stated that they have not supplied the alleged goods to the Respondent. In such case we do not find any reason to disallow the credit to the Respondent. We rely upon the judgment of M/s. Monarch Metals P. Limited v. Commissioner of C.Ex., Ahmedabad – 2010 (261) E.L.T. 508 (Tri.-Ahmd.) wherein it was held that credit is available where the assessee produced ample evidence in shape of documentary records to prove that they had actually received inputs from first stage dealer and made payments through Demand Draft. We also find that in the present matter dealers /transporters and scrap brokers during the cross-examination and adjudication process had confirmed supply of goods and admitted the transportation of the goods to the factory of Respondent and all the payments had been received by them as recorded in the books of account. Further it is well settled law that no Cenvat demand is sustainable on the basis of third party documents and their statements. In the present matter the goods were found to be duly shown as received and entered in the factory of the respondent. The statutory records of the respondent concern show the receipt and consumption of the goods. We therefore find Learned adjudicating authority has rightly allowed credit to the respondent.
28. 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 other local brokers 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 materials were diverted without receipts in the factory and use of the same in manufacturing of finished goods, how can there be production of given quantity of final product. Department in the present matter nowhere produced any corroborative evidences related to the diversion of raw materials supplied by the dealers any buyer of dealers goods who admitted that the respondent had delivered the said goods to them. We also find that the Hon’ble Gujarat High Court dealing with the issue in the case of Motabhai Iron Steel Industries (supra) 2015 (316) E.L.T. 374 (Guj.) agreed with the Tribunal despite the fact available in that case that as per RTO reports the vehicle were not capable of carrying the goods but on the basis of other facts, such as the goods were found duly recorded in the appellants factory and consumed in the production, the payment were made through banking channels, no evidence of non-supply of the goods by the consignor etc. Considering these facts, the Hon’ble Gujarat High Court itself upheld the order of the Tribunal.
29. In the present matter we also observed that these facts are not under dispute that the respondents have recorded the receipt of the goods in books of account and payment of the same was made through cheque. The finished goods were cleared on payment of Central Excise duty. Transportation charges were also paid by banking channel and such payment was accounted for in the books of account. There is no corroborative evidence that the inputs shown in the invoices of supplier by the respondent were not used in the manufacture of final product. Department has not disputed the correctness of quantity manufactured by the respondent recorded in production records. There is no allegation by the department regarding the financial flow back that against the said goods for which the payments were made through cheque, any cash payment was received by the respondent. With all these undisputed facts, merely on the basis of the some scrap brokers‟ statements and transporters‟ statements, it cannot be concluded that the inputs were not received by the Respondent. Therefore the facts are established that the Respondent have received the inputs in their factory used in the manufacture of final product and same was cleared on payment of duty. Therefore, there are no substantial evidence which result the disallowance of credit. The evidences placed by department before us are not cogent to establish that respondent is guilty of fraudulent availment of Cenvat credit. Mere suspicion or assumptions and presumptions cannot be the basis for such serious allegation of fraudulent availment of credit. From the facts and evidences placed before us, we are of the view that impugned Cenvat demand alleging fraudulent availment of credit is not sustainable. Accordingly, we are of the view that the proceeding of the show cause notice was rightly dropped by the Learned Commissioner in the present matter.
30. We also observe that Tribunal in worse cases of the assessees on the issue of alleged fraudulent availment of Cenvat held that credit can not be disallowed on the allegation of non receipt of the inputs. In case of M/s. Lloyds Metal Engg. Co. vs. CCE, Mumbai, 2004 (175) E.L.T. 132 (Tri.-Mumbai) it was 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.
31. 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) Limited 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. Limited 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.
32. We also noticed that in the case of Motabhai Iron & Ispat Indus. Commissioner of Central Excise – 2014 (302) E.L.T. 69(affirmed by Hon’ble Gujarat High court) where in respect of CENVAT Credit availed, the Revenue had alleged that the invoices are bogus and there has been no actual delivery of goods. It has been held that credit cannot be disallowed on basis of statements not corroborated by other evidence or goods not received by the assessee. Invoices issued by registered dealer duly recorded in statutory record books and payment made through Banking channel and there is no evidence that the said amount was received back by the assessee and that records maintained were not correct. Further, form-40 (Sales Tax paid by supplier) was produced in support of contention that the goods were actually transported. In view of the fact that no investigation was conducted at consignor’s place, statement of transporter was held not reliable and accordingly, the disallowance of CENVAT Credit was set aside.
Further Tribunal in the case of Commissioner of Central Excise, Ludhiana v. Nand Mangal Steels Pvt. Limited – 2013 (298) E.L.T. 105 (Tri.-Del.), in the case of CENVAT Credit availed on scrap, used in the manufacture of non-alloy steel ingots, and in fact that inputs were used for manufacture was not disputed, wherein there was allegation of non-receipt of goods based on incorrect vehicle no., it was held that it does not mean that the goods procured by appellants are not same. Further, the movement of goods from supplier firms and receipt of the same by the assessee was not disputed, but minor discrepancy in the invoice will not result in denial of credit.
The Tribunal in the case of Luxmi Metal Industries v. Commissioner of Central Excise, Delhi-II – 2013 (287) E.L.T. 487 (Tri.-Del.), wherein the fact that when the buyer purchased goods from registered dealer under proper invoice, there being no dispute about the credentials of the cenvatable invoices issued by the registered dealer and accompanying goods, it was held that the buyer cannot be expected to go beyond that to verify and find out as to whether the registered dealer had purchased the same legally or not and in such facts, the denial of CENVAT Credit was set aside in favour of the assessee.
33. We also find that it is an undisputed fact that all the purchases were duly recorded in the statutory books of the respondent and the goods were also found to be entered in statutory records of the respondent. There is no evidence which can show that the records maintained by the respondent are not correct. Only on the basis of statements of some of the persons and their private records, the huge credit is sought to be disallowed whereas the statements were retracted and with no corroboration. We therefore hold that in the present matter proposal for disallowance of credit to the respondent has no any basis.
34. Without prejudice, we also find that in the whole matter department has relied upon third party records and statements. The Cenvat demand alleging fraudulent availment of Cenvat credit on strength of invoices without receiving inputs cannot be held sustainable solely based on statements of third party and their records. So long the suppliers in their statements had admitted supply of goods on duty paying documents and respondent also produced documentary evidences in respect of receipt of inputs, use thereof in manufacture of final product, statutory records showing manufacture and clearance of final product on payment of duty, the receipt of inputs cannot be doubted. Since the Revenue failed to prove alternative source of receipt of raw materials and also money flow back from manufacturer/supplier to the assessee, it cannot be said that they had not received the inputs especially when statements relied upon by the Revenue are contrary to the documentary evidence on record produced by the Respondent. Therefore, the finding of the Adjudicating authority on this issue has to be accepted. We also noticed that in the present case the reliance of third party documents /statements while conforming demand against present respondent is also observed to be unjustified and unreasonable. It is necessary to check the evidentiary value of the third party evidence. The relevant case law in the case of Bajrangbali Ingots & Steel Pvt. Limited & Suresh Agarwal v. CCE, Raipur in Appeal Nos. E/52062 & 52066/2018, which held as follows.
“9. The law i.e. as to whether the third party records can be adopted as an evidence for arriving at the findings of clandestine removal, in the absence of any corroborative evidence, is well established. Reference can be made to Hon’ble Allahabad High Court decision in the cases of Continental Cement Company v. Union of India – 2014 (309) E.L.T. 411 (All.) as also Tribunal’s decision in the case of Raipur Forging Pvt. Limited v. CCE, Raipur-I – 2016 (335) E.L.T. 297 (Tri. – Del.), CCE & ST, Raipur v. P.D. Industries Pvt. Limited – 2016 (340) E.L.T. 249 (Tri. – Del.) and CCE & ST, Ludhiana v. Anand Founders & Engineers – 2016 (331) E.L.T. 340 (P & H). It stand held in all these judgments that the findings of clandestine removal cannot be upheld based upon the third party documents, unless there is clinching evidence of clandestine manufacture and removal of the goods.”
In the matter of Commissioner of C. Ex., Indore v. ParagPentachem Pvt. Limited Reported in 2018 (360) E.L.T. 1025 (Tri. – Del.) the Tribunal observed as under:
“Cenvat credit – Bogus transactions – Invoice only received without goods – Evidence – Third party evidence – Revenue, inter alia, relying on written slops/entries of laptop seized from residence of cashier of dealer issuing invoices, alleging that these contain details of cash transaction in respect of goods not of business – The seized records therefore are third party records – Settled law in catena of decisions including that of Apex Court in 1998 AIR SC 1406 that third party records alone cannot be relied upon as admissible piece of evidence – Further, even in these records there is no identification of person to whom said alleged cash transaction belong – Said entries having not been corroborated by any independent evidence, not reliable – On same facts and investigations, credit allowed in respect of another party and no appeal filed against such order – Denial or credit on the basis of these entries not sustainable – Rule 3 of Cenvat Credit Rules, 2004. [paras 21, 22, 23, 24, 26].”
35. From the above judgments, it has been consistently held that demands of whatever nature cannot be confirmed solely on the basis of third party evidence/record. In view of the above discussion, we find that the Cenvat demand cannot be confirmed. We hold that the respondent have satisfied the requirement of receipt of inputs along with cenvatable invoices and accordingly, the Cenvat credit taken by them is in accordance with the scheme of the Act read with Cenvat Credit Rules.
36. Without prejudice, in the present matter we also find that the ground raised in the Revenue’s appeal is that statements recorded by the investigating officers carried higher evidentiary value, and records maintained by the registered dealers and respondent company in respect of disputed transactions could not have been considered as relevant evidence by the adjudicating authority. However, we found force is arguments of respondents that in case statements recorded by the Revenue officers were contrary to the information and detailed entered in the statutory records and other documents, then the documentary evidence carried higher evidentiary value compared to the oral statements. In the present matter as the documentary evidence does not establish non–receipts of goods and availment of Cenvat credit without receipts of the goods, 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. 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 in following decisions.
“(i) The Tribunal in the case of R.P. Industries v. Collector of Customs – 1996 (82) E.L.T. 129. Although in that case the documentary evidence was seized during the search that would not alter the position in this case since the documentary evidence in the form of moneychanger’s certificate submitted to the department before the issue of the show cause notice has been verified and found to be genuine and correct. The same view has been taken in final Order Nos. CI/2874 & 2875/WZB/2001, dated 19-9-2001 [2002 (140) E.L.T. 225 (T)] in the case of Kishin Shewaram Loungani & Another v. CC, Mumbai.
(i) The Tribunal in the case of Manish Kumar Jain v. CCE Chennai – 2008 (229) E.L.T. 266 (Tri.-Chen.) and Al-Futtaim Engineering Vs, CC, Chennai – 2007(219)ELT 490 has clearly settled the law that documentary evidences would prevail over the oral evidence and the statements of personnel.”
In our considered view, documentary evidence should prevail over the oral statement made by persons and particularly when the same were admittedly retracted. We also find that when the investigating authority visited the factory premises of the respondent, they did not take any stock of the raw materials which were entered in RG 23A Part I/ and credit was availed. In the absence of any evidence of non-accountal of raw material or shortage of quantity of raw material, the allegation of non-receipt of inputs is without any basis hence not sustainable.
37. We also observed that the Learned Commissioner has recorded in the present order the true and full facts coming out from the cross-examinations and retractions filed by the witnesses, statutory records maintained by the respondent and dealers and all the concerned parties, and also the true and full facts coming out from the commercial records like bank statements, ledgers of all concerned parties. From the detailed analysis of evidence made by the Ld. Commissioner and specific and clear finding recorded by him in the adjudicating order, it stands proved that the respondent herein has received duty paid raw materials from the registered dealers involved in this matter, and all such duty paid inputs were received at the respondent’s factory, they were duly recorded in statutory records and Cenvat credit register. In the light of the concurrent findings of fact recorded by Learned Commissioner and the elaborate order made by the Learned Commissioner, no infirmity was found in the impugned order of the Learned Commissioner so as to warrant interference.
38. Learned AR has relied upon various judgments at the time of hearing as well as in their written submission dated 21.08.2023. After considering those judgments, we find that this nature of cases are based on the peculiar facts of each case. In every judgment the facts are different from that of other case. In the present case also the facts of the judgment relied upon by learned AR are different from the facts of the present case, therefore the judgments relied upon by the learned AR will not be of any help to the Revenue.
39. For the above reasons, we find no merit in the appeals of Revenue, therefore the impugned order is upheld and the appeals filed by the Revenue are dismissed. Cross objections are also disposed of.
(Pronounced in the open court on 23.08.2023)