BAJRANG CASTINGS PVT. LTD. AND ORS. Vs. COMMISSIONER, CENTRAL EXCISE & SERVICE TAX
LAWS(CE)-2015-7-3
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on July 17,2015

Bajrang Castings Pvt. Ltd. And Ors. Appellant
VERSUS
Commissioner, Central Excise And Service Tax Respondents


Referred Judgements :-

RHINO RUBBERS PVT. LTD. V. CCE BANGALORE [REFERRED TO]
CCE DAMAN V. DHAKAD METAL CORPORATION [REFERRED TO]
T.G.L. POSHAK CORPORATION V. CCE HYDERABAD [REFERRED TO]
BENI V. BISAN DAYAL [REFERRED TO]
SWADESHI POLYTEX LTD. V. COLLECTOR [REFERRED TO]
EMMTEX SYNTHETICS LTD. V. CCE NEW DELHI [REFERRED TO]
CCE CHANDIGARH V. SHAKTI ROLL COLD STRIPS PVT. LTD. [REFERRED TO]
HIRA LAL V. RAM RAKHA [REFERRED TO]
SIBAL RELIED. IN YESUVADIYAN V. SUBBA NAICKER [REFERRED TO]
VIRAJ ALLOYS LTD. V. CCE THANE [REFERRED TO]
CCE CHANDIGARH V. NEEPAZ STEEL LTD. [REFERRED TO]
CCE COIMBATORE V. RAJGURU SPINNING MILLS [REFERRED TO]
SURJEET SINGH CHHABRA VS. UNION OF INDIA [REFERRED TO]
CENTRAL BUREAU OF INVESTIGATION VS. V C SHUKLA [REFERRED TO]
LAKSHMAN EXPORTS LIMITED VS. COLLECTOR OF CENTRAL EXCISE [REFERRED TO]
T G L POSHAK CORPORATION VS. COMMISSIONER OF C EX [REFERRED TO]
BASUDEV GARG VS. COMMISSIONER OF CUSTOMS [REFERRED TO]
MONARCH METALS P. LTD. VS. COMMISSIONER OF C. EX., AHMEDABAD [REFERRED TO]
C.C.E. VS. PARMATMA SINGH JATINDER SINGH ALLOYS PVT. LTD. [REFERRED TO]


JUDGEMENT

H.K.THAKUR,MEMBER (T) - (1.)APPEAL No. E/10689/2015 has been filed by the main Appellant M/s. Bajrang Castings Pvt. Ltd. against OIA No. AHM -EXCUS -002 -APP -191 to 198 -14 -15, dt. 20.02.2015, passed by Commissioner (Appeals -II) Ahmedabad as First Appellate Authority. Appeal No. E/10689/2015 -SM is filed by Shri Amit R. Bhasin, who is the Director of the main Appellant.
(2.)Shri Alok Barthwal (Advocate) and Shri R.K. Jain (Advocate) appeared on behalf of the Appellants. Shri Alok Barthwal argued that main Appellant was the manufacturer of M.S. Ingots before its closure from M.S. Scrap and Ferrous Alloys obtained from different sources. That investigations were conducted at the end of a Broker Shri Bharat Sheth by DGCEI on the grounds that no M.S. Scrap was received and that only documents were obtained by the main Appellant. That according to Revenue, even if the entire payments are made through cheques, but an equivalent amount was received by the Appellant in cash transferred through Angadias after deduction of some commission by the Broker. That certain diaries were recovered from Broker Bharat Sheth which indicate that material against the Cenvatable documents were sold to certain re -rolling mills clandestinely against cash payment as per the investigation. That certain statements of the transporters, employees of Shri Bharat Sheth, few ship breaking units and angadias were recorded by the investigation to rely upon and conclude that all purchase of M.S. Scrap was only on paper and no inputs were received by the main Appellant.
2.1 Learned Advocate argued that the inputs received was M.S. Scrap as per the invoices whereas as per the records of Brokers M.S. Plates were supplied to re -rolling mills. That the diary maintained by the Broker also talk of M.S. Plates and not M.S. Scrap. He furnished a copy of one such Cenvatable invoice. It was his case that even invoice numbers under which main Appellant has received M.S. Scrap is not mentioned in the private records of the Broker. That due to these discrepancies, the statements of the Broker and private diary cannot be relied upon. That no alternative raw material procurement has been shown by investigation for manufacturing undertaken by main Appellant. That there was no excess or shortage of raw materials detected during the entire operation from the Appellant. That there is no statement from the Director or employee of the main Appellant that inputs were not received alongwith the duty paying documents. That no investigation has been done also at the end of re -rolling units to unearth whether they have received M.S. Plates. That Appellants asked for cross -examination of all the third party witnesses, whose statements are relied upon, but no cross -examination was given by the Adjudicating authority. That total amount of CENVAT Credit with respect to 5 ship breaking units is only Rs. 3,52,890.00 against a demand of Rs. 31,17,904.00. That out of these 5 ship breaking units, 3 ship breaking units have refused having not supplied goods alongwith documents. Learned Advocate made the Bench go through the statements of Shri Satyapal Wilaitiram of M/s. Maria Ship Breaking. Shri Maheshbhai Dayal Patel of M/s. P. Patel Ship Breaking Co. and Shri Ramesh Agarwal of M/s. Hoogly Ship Breakers to argue his case. He also relied upon the following case laws to argue that no case can be made out against the Appellants as no investigation has taken place at the end of recipients of clandestinely diverted inputs i.e. M.S. Patel Steel Industries & Rolling Mills or M/s. Panchtantra: - -

"a) Monarch Metals P. Ltd. v. CCE Ahmedabad [2010 (261) ELT 508 (Tri -Ahmd)]

b) CCE Ludhiana v. Parmatma Singh Jatinder Singh Alloys Pvt. Ltd. [ : 2011 (266) ELT 67 (Tri -Del)]"

2.2 Learned Advocate emphasized again that in the absence of any cross objection of the witnesses, no case of clandestine activity can be established only on the basis of few statements as held in Basudev Garg v. Commissioner of Customs [ : 2013 (294) ELT 353 (Del.)] and CCE Daman v. Dhakad Metal Corporation [ : 2012 (285) ELT 382 (Tri -Ahmd)].

2.3 He further relied upon the following case laws to argue that a case cannot be made only on the basis of few statements of brokers, transporters, angadias and diaries without giving cross -examination: - -

"a) CCE Coimbatore v. Rajguru Spinning Mills [2009 (243) ELT 28 (Tri -Che.)]

b) Rhino Rubbers Pvt. Ltd. v. CCE Bangalore [ : 1996 (85) ELT 260 (Tribunal)]

c) CBI v. V.C. Shukla [ : AIR 1998 SC (1406)]

d) TGL Poshak Corporation v. CCE Hyderabad [ : 2002 (140) ELT 187 (Tri -Che.)]

e) Emmtex Synthetics Ltd. v. CCE New Delhi [2002 (147) ELT 649 (Tri -Del)]

f) CCE Chandigarh v. Neepaz Steel Ltd. [2008 (230) ELT 218 (P&H)]"

(3.)SHRI S. Shukla (AR) appearing on behalf of the Revenue argued that various statements recorded during the investigation are corroborated by the diary maintained by the broker. That Shri Amit R. Bhasin also admitted the correctness of the statement of the broker and his employee by perusing those statements. That all the statements were corroborating each other, therefore, request for cross -examination of the witnesses were correctly denied by the lower authorities. Learned AR made the Bench go through Para 32.1 of the OIO to drive home the point that principles of natural justice were not violated in view of Apex Courts decision in Surjeet Singh Chhabra v. Govt. of India [ : 1997 (89) ELT 646 (SC)]. Learned AR also made the Bench go through Para 34 of the OIO dt. 27.06.2014/01.07.2014 to argue that accounts maintained in the diary had complex codes which were decodified by Shri Manish Patel, Accountant of the Broker who was maintaining the said diary. Learned AR also made the Bench go through Para 16 of the OIA to argue that when statements are not retracted then the cross -examination can be denied in view of the case law of Ahmednagar Rolling Mills [ : 2014 (300) ELT 119 (Tri -Mum)]. That First Appellate Authority has also relied upon the case law of Viraj Alloys Ltd. v. CCE Thane -II [2009 (177) ELT 892] and Bhagwati Steel Cast Ltd. v. CCE Nashik [2012 (02) ELT LCX 0200].
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