Rajive Bhalla, J. - (1.) By way of this order, we shall decide CEA-88-2010 and CEA-90-2010. For the sake of convenience, facts are being taken from CEA-88-2010.
(2.) The appellant challenges orders dated 27.07.2009, passed by the Customs, Excise & Service Tax Appellate Tribunal, Principal Bench (hereinafter referred to as the 'CESTAT') on the following substantial questions of law: - "1. Despite the specific findings of the adjudicating authority and the Commissioner (A), on the commission of the offence in the instant case, vis-a-vis the guidelines set down by Shri R.K.Gupta for identifying bogus transactions, would a general statement, say, of the nature of Shri R.K. Gupta's, lose its evidentiary value and its preeminent fulcrum position in a case that is built around it. 2. Whether the preponderance of evidences and probabilities in this case establish the commission, by the respondents, of the offences alleged in the show cause notice and whether the Tribunal was correct in ignoring such preponderance of evidences and probabilities in passing their order against the appellants."
(3.) Counsel for the appellant submits that Shri R.K.Gupta, proprietor M/s R.K. Enterprises admitted that he indulged in bogus transactions and passed MODVAT/CENVAT credit by issuing invoices without actually transferring goods. Upon inquiry it was established that Shri R.K.Gupta did not possess any godown, was operating from residential premises and his office in Farbidabad was a one room tenement without any infrastructure. The inquiry also revealed that slips, GR books, numbering machines and blank cheques, taken into possession were accepted by Mr.R.K.Gupta to be false. The GR books of M/s Paradise Tempo Transport Service, Bata Chowk, Faridabad and Golden Transport Company, Nehru Ground, NIT Faridabad, were accepted as forged as it was admitted that these transport companies do not exist. The rubber stamps pertaining to the department, invoice books, GR books etc. were also recovered. Shri R.K.Gupta also admitted that he had not supplied any goods beyond 6 metric tonnes. A show cause notice was, therefore, issued to the respondent and after considering the entire matter, credit of Rs.2,43,024/- of an equal amount etc. was imposed. The CESTAT has wrongly placed reliance upon the statement made by Shri R.K.Gupta that consignments of less than 6 metric tonnes are genuine and placed reliance upon a judgment of the CESTAT passed in "Garima Enterprises (P) Ltd. Vs. Commissioner of Central Excise, Delhi-IV,2005 182 ELT 106" (Tri.-Del.) while accepting the appeal. The statement has to be read in its entirety and alongwith material recovered from the office of Shri R.K.Gupta and failure of the respondents to prove receipt and consumption of the goods allegedly received from Shri R.K.Gupta. The judgment in Garima Enterprises's case , therefore, does not apply to the present case. It is further submitted that even if Shri R.K.Gupta has not named the respondent as a beneficiary of illegal MODVAT credit, he has delimited the modus whereby he conducted his operations thereby proving that the respondent was party to a fraud played by Shri R.K. Gupta. It is further contended that Shri Deepak Kumar Jain, Director of M/s Vardhman Strips (P) Ltd., in his statement dated 01.02.2001 stated that they had purchased goods from M/s R.K.Enterprises and referred to invoices as well as submitted copies of the relevant GR but this statement and these documents do not discharge the onus to prove that these transactions were genuine. All relevant facts being within the knowledge of the respondent, the onus to prove that these transactions were valid, lay upon the respondent. The respondent apart from the aforesaid statement has not led any evidence to prove the legality of transactions whereby they claimed MODVAT credit. The CESTAT has, therefore, committed an error in accepting the appeal and setting aside the orders passed by the assessing authority and the appellate authority.;