Custom, Excise & Service Tax Tribunal
M/S Agr Steel Strips Pvt. Ltd vs Cce, Delhi -Iii on 5 April, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Block No.2, R. K. Puram, New Delhi.
Date of hearing/decision: 05.04.2010
(i) Excise Stay No. 3352 of 2009 in Excise Appeal No. 3280 of 2009
M/s AGR Steel Strips Pvt. Ltd., Appellant
Vs.
CCE, Delhi -III Respondent
AND
(ii) Excise Stay No. 3353 of 2009 in Excise Appeal No. 3281 of 2009
Vikas Aggarwal, M.D. of
M/s AGR Steel Strips Pvt. Ltd., Appellant
Vs.
CCE, Delhi -III Respondent
Appearance: Rep. by Sh. R. C. Choudhary, Advocate for the appellants
Rep. by Sh. Sunil Kumar, DR for the respondent
Coram: Honble Shri Justice R.M.S. Khandeparkar, President
Honble Shri M. Veeraiyan, Member [Technical]
ORAL ORDER
Per: M. Veeraiyan:
Heard both sides on the stay petitions.
2. The applicant company claims to have received H.R. Coils for use in the manufacture of C.R. strips falling under chapter heading 72112950. During the investigation conducted by the officers, three of the registered dealers (who as per the invoices supplied the inputs to the applicant company) denied having supplied any inputs and stated that they merely supplied cenvatable invoices and after receiving payment by cheque from the applicant-company, withdrew the money from their account and paid back to the applicant company retaining their commission. Thus, the investigation revealed that the applicant company was receiving payments from input suppliers and the reason for such payment have not been satisfactorily explained. The evidence tendered by the authorized signatory of the company and the Director of the applicant company show that the records like inward register, weighing slips and outward register were being systematically destroyed after three to four months. In spite of repeated queries by the investigating officers, the company officials were not able to reveal the names of buyers of the final products manufactured by them. Appreciating the above evidence, the original authority confirmed a demand of Rs.18,06,775/- and imposed equal amount as penalty on the applicant company. He also imposed a penalty of Rs.9 lakh on the applicant Director. On appeal, the Commissioner (Appeals) has upheld the order of the original authority.
3. Learned Advocate submits that the statements of the registered dealers have been relied upon without affording cross examination and the said action is in violation of principles of natural justice. He also submits that they have maintained all statutory records regarding receipt of inputs, use of the inputs in the manufacture and clearance details of final products. Learned Advocate further submits that it was not possible to furnish the details asked for by the investigating officer regarding to whom they have supplied the final product made out of the specific inputs.
4. Learned DR submits that the registered dealers have clearly stated that only invoices were issued by them and that no goods were supplied. The applicant-company was systematically destroying the supporting documents relating to receipt and disposal of the inputs and final products. The receipt of payments from supplier of inputs has not been explained by the applicant company.
5. We have carefully considered the submissions made from both sides. The applicant company has taken cenvat credit of duty paid on inputs on the basis of invoices issued by the registered dealers. Taking of the credit is contingent upon the fact of receipt of the duty paid inputs, use of the same for further manufacture. In the light of the evidences relied upon by the Department, we, prima-facie, hold that the applicant has not proved that they have received the material and utilized the same for manufacture of the final products and, under these circumstances, the credit taken by them was irregular.
6. Taking into consideration the entire facts and circumstances of the case we direct the applicant company to deposit a sum of Rs. 10 lakhs within eight weeks. Subject to deposit of the above amount, we waive the pre-deposit of balance amount of duty, interest and penalties on both the applicants and stay recovery thereof till disposal of the appeals.
7. Both the stay applications are disposed of accordingly.
8. Appeals to be listed for reporting compliance on 21st June 2010.
[Justice R.M.S. Khandeparkar] President [M. Veeraiyan] Member [Technical] /Pant/ ??
??
??
??
1