Custom, Excise & Service Tax Tribunal
Agrawal Metal Works Pvt Ltd vs Commissioner, Cgst-Alwar on 22 December, 2021
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
Excise Appeal No.50764 of 2020 [SM]
[Arising out of Order-in-Appeal No.12-16 (SM)/CE/JPR/2020 dated 18.02.2020
passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur]
M/s.Agrawal Metal Works Pvt. Ltd., Bhiwadi ...Appellant
VERSUS
Commissioner of Central GST, Alwar ...Respondent
APPEARANCE:
Mr.T.R. Rustagi, Advocate for the Appellant Mr.Pradeep Gupta, Authorised Representative for the Respondent WITH Excise Appeal No.50765 of 2020 [SM] [Arising out of Order-in-Appeal No.12-16 (SM)/CE/JPR/2020 dated 18.02.2020 passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur] M/s.Vishal Sharma, Sr. Manager ...Appellant Agrawal Metal Works Pvt. Ltd., Biwadi VERSUS Commissioner of Central GST, Alwar ...Respondent APPEARANCE:
Mr.T.R. Rustagi, Advocate for the Appellant Mr.Pradeep Gupta, Authorised Representative for the Respondent WITH Excise Appeal No.50885 of 2020 [SM] [Arising out of Order-in-Appeal No.12-16 (SM)/CE/JPR/2020 dated 18.02.2020 passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur] M/s. Unnati Alloys Pvt. Ltd. ...Appellant 205, Ajeet Bhawan, 4697/6, Ansari Road, Daryaganj, Delhi-110002.
VERSUS
2
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50886 & 50910/2020 [SM]
Commissioner ...Respondent
Central Excise & Central GST, Alwar
Division C, Alwar Bye Pass Road,
Bhiwadi, Alwar
APPEARANCE:
Ms. Ekta Kapoor, Advocate for the Appellant Mr.Pradeep Gupta, Authorised Representative for the Respondent WITH Excise Appeal No.50886 of 2020 [SM] [Arising out of Order-in-Appeal No.12-16 (SM)/CE/JPR/2020 dated 18.02.2020 passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur] M/s. Amit Gupta ...Appellant S/o. Shri Ramniwas Gupta, 307, Express Tower, Azadpur Commercial Complex, Delhi - 110033.
VERSUS
Commissioner ...Respondent
Central Excise & Central GST, Alwar
Division C, Alwar Bye Pass Road,
Bhiwadi, Alwar
APPEARANCE:
Ms. Reena Rawat, Advocate for the Appellant Mr.Pradeep Gupta, Authorised Representative for the Respondent AND WITH Excise Appeal No.50910 of 2020 [SM] [Arising out of Order-in-Appeal No.12-16 (SM)/CE/JPR/2020 dated 18.02.2020 passed by the Commissioner (Appeals), Central Excise & CGST, Jaipur] M/s. V.K. Enterprises ...Appellant A-34 Ganpati Plaza, Main Road Bhiwadi, Alwar, Rajasthan.
VERSUS
Commissioner ...Respondent
Central Excise & Central GST, Alwar
Surya Nagar, Alwar
Rajasthan - 301001
APPEARANCE:
3
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50886 & 50910/2020 [SM]
Mr. Jitendra Singh, Advocate for the Appellant Mr.Pradeep Gupta, Authorised Representative for the Respondent Coram: HON'BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) DATE OF HEARING: 26.08.2021 PRONOUNCED ON: 22.12.2021 FINAL ORDER Nos. 52089-52093/2021 RACHNA GUPTA The present order disposes of 5 appeals as tabled below. All of them arising out of same adjudication and the issue involved also been same:-
Sl. Appeal SCN No. & Date OIO No. & Dt. OIA No. & Dt. Demand/
No No. penalty
. confirmed
1 E/50764/ V(74)41/SCN/AMW 153(CE)/2018 12-16/SM/ 1094931
2020 /BHD-I/2017-18 -19 CE/JPR/2020 alongwith
2677 Dt. Dt.14.3.2019 dt.18.02.2020 interest,
29.06.2017 Penalty of
Rs.10,94,931/-
2 E/50765/ V(74)41/SCN/AMW 153(CE)/2018 12-16/SM/ 1094931/---
2020 /BHD-I/2017-18 -19 CE/JPR/2020 Penalty of Rs.
2677 Dt. Dt.14.3.2019 dt.18.02.2020 1,25,000
29.06.2017
3 E/50885/ V(74)41/SCN/AMW 153(CE)/2018 12-16/SM/ Penalty of
2020 /BHD-I/2017-18 -19 CE/JPR/2020 Rs.2,00,000/-
Dt.29.06.2017 Dt.14.3.2019 dt.18.02.2020
4. E/50886/ V(74)41/SCN/AMW 153(CE)/2018 12-16/SM/ Penalty of
2020 /BHD-I/2017-18 -19 CE/JPR/2020 Rs.2,00,000/-
/2081 Dt.14.3.2019 dt.18.02.2020
Dt.29.06.2017
5. E/50910/ V(74)41/SCN/AMW 153(CE)/2018 12-16/SM/ Penalty of
2020 /BHD-I/2017-18 -19 CE/JPR/2020 Rs.2,00,000/-
Dt. __/06/2017 Dt.14.3.2019 dt.18.02.2020
2. The main appellant M/s. Agrawal Metals are engaged in manufacture of non-ferrous flat roll products. On the basis of specific information received in the Directorate General of Central 4 E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] Excise intelligence head quarters (hereinafter referred to as DGCEI). That one Shri Amit Gupta was operating several companies, with his relatives and wife as directors therein for importing prime metals, namely:-
1. M/s. Brilliant Metals Pvt. Ltd., Delhi
2. M/s. Forward Minerals & Metal Private Ltd., Delhi
3. M/s. Progressive Alloys (India) Pvt. Ltd., Delhi
4. M/s.Unnati Alloys Pvt. Ltd., Gurgaon
5. M/s.Unnati Alloys Pvt. Ltd., Delhi
6. M/s.Unnati Alloys Pvt. Ltd., Jaipur
7. M/s.Moral Alloys Private Limited, Delhi
8. M/s.Moral Alloys Private Limited, Gurgaon
9. M/s.Moral Alloys Private Limited, Jaipur
3. These Companies were informed to have been passing on inadmissible Cenvat Credit on Cenvatable invoices of non-ferrous metals to the manufacturers of excisable goods including the main appellant M/s. Agrawal Metals without physical delivery of the goods. Based on the said information, the officers of DGCEi conducted search of various premises on 06.12.2012. Various incriminating documents, unaccounted non-ferrous metal and unaccounted cash were recovered during the search, which were detained by the DGCEI officers. The cash was alleged to have been generated by Shri Amit Gupta from the cash sale-proceeds without bills of sale of prime non-ferrous metals. Accordingly, a Show Cause Notice No.2677 dated 29.06.2017 was served upon 5 E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] the appellants herein proposing the demand as mentioned in the above table from main noticee M/s. Agrawal Metals alongwith the interest and also proposing the penalties against the remaining appellants as mentioned in the above table. The said proposal have been confirmed initially by the Order-in-Original as mentioned in the table above. The appeals, thereof have been rejected vide the order under challenge. Being aggrieved, the appellant is before this Tribunal.
4. We have heard Mr. T.R. Rustagi, Ms. Ekta Kapoor, Ms. Reena Rawat & Mr. Jitendra Singh, ld. Counsels for the appellants and Mr. Prateep Gupta, Authorized Representative for the Revenue.
5. It is submitted on behalf of the main appellant that the appellant avails Cenvat Credit on the basis of invoices issued by the registered dealers on which the amount of duty suffered is duly mentioned. The main raw-material used by the appellant for manufacture of copper-brass phosphor bronze foils, strips , sheets and ingots is copper scrap which is generally procured from the dealers and it could also be imported for indigenous scrap. The demand in question has been proposed against the appellant based on 3 invoices that is one bearing No.33 dated 13.08.2012, 34 dated 14.08.2012 and 54 dated 17.10.2012 issued by M/s.
V.K. Enterprises. It is submitted that said V.K. Enterprises is found to be a registered dealer in Bhiwadi as per the investigation 6 E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] of DGCEI. It is submitted that the demand as well as penalty against the appellant has been proposed on assumption basis merely relying upon the statement of Amit Gupta. No enquiries, whatsoever, were made at the end of the appellant nor got statement of any person of Appellants Company recorded. It is submitted that the goods were duly transported from the premises of V.K. Enterprises to the premises of Agrawal Metal Works by Trucks whose registration Nos. were available in the respective invoices. Proper records of receipt, weighment and entries into factory Registers were made and the payment were made to V.K. Enterprises through Cheque / Online transfer but none of the appellant's records were taken into consideration by the Investigating Agency. The Adjudicating Authority below has also failed to consider the same. Appellant's records have regularly been audited without any noticed discrepancy, but Commissioner (Appeals) has ignored the said submissions. The order, accordingly, is not sustainable and therefore, is prayed to be set aside. Ld. Counsel has relied upon the following case laws:-
1. M/s.Arya Alloys Private Limited, Romy Bansal, Director, Raj Kumar Bansal, Director (Former), Amit Gupta vs. Commissioner , Cent6ral Goods & Servie Tax, Customs & Central Excise, Alwar - 2020 (3) TMI 148 - CESTAT, New Delhi.
2. Gupta Metal Sheets Pvt. Ltd. Agrawal Metal Works Pvt. Ltd., Shiva Metal Traders, V.K. Enterprises vs. CCE, Delhi- III -
2018 (11) TMI 1510 - CESTAT, Chandigarh.
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3. Rohit Aggarwal, Akash Traders and SB Aromatics vs. CCE & ST - Jammu & Kashmir and CCE - Delhi - 2018 (11) TMI 830 -CESAT, Chandigarh.
4. M/s. Yahska Polymers Pvt. Ltd., M/s.Vardhman Chemicals vs. E, Ahmedabad-II - 2020 (I) TMI 673 - CESTAT, Ahmedabad.
6. All these arguments have been adopted by the remaining appellants. In addition on behalf of Shri Amit Gupta, it is mentioned that the entire case has proceeded on his statement as was recorded on 06.12.2012 but the said statement was recorded under compulsion, coercion otherwise also the answers in the said statement were not actually of Amit Gupta but were dictated by the investigating Officers only. The said facts have clearly been stated by said Shri Amit Gupta at the time when he was allowed to be cross-examined on 10.04.2018 by the co-noticees. The statement of Shri Sanjeev Maggu, the owner of impugned transport company, dated 06.03.2013 was also got retracted and his cross-examination dated 10.04.2018 reveals the correct state of affairs which are sufficient to falsify the entire case of the Department. It is impressed upon that the adjudicating authority below has failed to consider the said cross-examinations. Order is, accordingly, liable to be set aside. Appeals on behalf of remaining appellants are also prayed to be allowed. 8
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7. To rebut these submissions, it is submitted by ld. D.R. that Commissioner (Appeals) has given the finding by discussing each of the issue placed before him. The evidence collected and statements recorded during the investigation have duly been discussed by him. It is submitted that the statements of the Driver, Transporter and other persons relied as upon the show cause notice have proved that the entire business was masterminded by Shri Amit Gupta by following a particular modus operandi of issuing fake invoices. The payments made by Cheque were also the part of the said modus operandi and were merely an eyewash. It is submitted that present is not the case of disallowance of Cenvat Credit of legitimate supplies as is alleged by the appellants, Commissioner (Appeals) has clearly established that the Cenvat Credit was facilitated to the appellants by adopting specific modus operandi. Three of the invoices of M/s. Agrawal metals as mentioned in the Show Cause Notice have rightly been held to be the fake invoices. There is no evidence of any goods to have been transported from M/s. V.K. Enterprises to M/s. Agrawal based on said invoices. Hence there is no infirmity in the orders under challenge. Appeals are accordingly, prayed to be dismissed.
8. After hearing the rival contentions and perusing the entire record, it is observed and held as follows:-
9
E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] Revenue had made out a case that Shri Amit Gupta has admitted about creating fictitious firms in the name of M/s.Forward Minerals & Metals Pvt. Ltd., Unnati Alloys Pvt. Ltd. etc. (as mentioned above) to issue Cenvatable invoices without accompanying the goods. Hence, no question arises for M/s. Agrawal Metal Works to have receive goods mentioned in the three invoices bearing No. 33, 34 & 54. Hence, the Agrawal Metals, the recipient of invoices being manufacturers are alleged to be not entitled to take the Cenvat Credit. Accordingly, the credit availed, has been confirmed with the order of imposition of penalties.
9. I observe that other than statement of Mr.Amit Gupta as was recorded on 06.12.2012 there is no other document on record to corroborate the documents alleged to be incriminating, as were recovered by the Officers of DGCEI during the investigations. The apparent fact on record remains are that the said Amit Gupta was cross-examined on 10.04.2018 with respect to his said statement dated 06.12.2012. The perusal of said statement specifically answers to question No.7 & 8, makes it clear that his statement of 06.12.2012 was got recorded under threat or pressure. He was brought to the office of DGCEI in the investigating officer's vehicle and, as such, was not at all mentally alert while giving the said statements. Answer to question No.9 therein clarifies that he denied having any share holding in the business activities of M/s. 10
E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] Forward Mineral & Metals, M/s. Unnati Alloys Pvt. Ltd. & M/s. Moral Alloys Pvt. Ltd.
10. He mentioned to be a practicing Company Secretary who was looking after the accounting and the Secretarial work of those Companies. He out-rightly denied about supplying invoices to several companies on payment of Commission. The incriminating record as was recovered by DGCEI from his premises, when shown to him, he denied the record to bear his handwriting. He also mentioned that no copy of any recovered record was provided to him till the Show Cause Notice was served upon him. Perusal of cross-examination of Amit Gupta on behalf of all the co- noticees makes it abundantly clear that his statement dated 06.12.2012 was an incorrect statement as none of the answer therein was correct nor actually were deposed by him rather were the dictated by the Department Officers only. Any use of fake builties of M/s.Leo Trans & Logistics was also out-rightly denied.
11. I also observed that the owner of said Leo Trans & Logistics Shri Sanjeev Maggu was also cross-examined on 10.04.2018 itself who also denied his earlier statement dated 06.09.2013 to be his voluntary statement. He deposed that the said statement was got typed by the Officers of DGCEI and he was merely asked to sign it. He clarified that his vehicles did travel to the destinations mentioned in the builties and the builties are genuine. Mr. Maggu also clarified that operations of his Company M/s. Leo Trans & 11 E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] Logistics did not seize in the year 2006 are still continue. Shri Sher Singh who deposed it to seize after 2006 is denied to be the employee of M/s. Leo Trans & Logistics. In the light of the above discussed cross-examination of Shri Amit Gupta ad Shri Sanjeev Maggu, the earlier statements of Amit Gupta dated 06.12.2012 and that of Shri Sanjeev Maggu of 06.09.2013 become redundant. From the order under challenge, it is abundantly clear that except relying upon these statements and presuming the corroboration from the statement of other persons no other evidence has been discussed by Commissioner (Appeals). He rather has wrongly recorded in para 18.1 of the order under challenge that from the cross-examination of the statements of Shri Amit Gupta and Shri Sanjeev Maggu no retraction at all is apparent. This particular observation is sufficient to set aside the order which is solely relying the statements of Examination - in - Chief of said Amit Gupta and said Sanjeev Maggu.
12. I further observe that on same investigation several cases have already been adjudicated by this Tribunal. In M/s. Arya Alloy Pvt. Ltd. (supra) it has been held that there is no evidence on record except the statement of Shri Amit Gupta and the transporter not even for proving the allegations of receiving back of cash as against the payments made through banking channels. It is rather the fact that the appellant was reflecting the receipt of inputs in their statutory records, the Revenue has not alleged that the inputs required for making the final products were procured by the appellant from any other source. There is no denial that the 12 E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] main appellant was manufacturing and clearing his final product. In the absence of the inputs it is not possible to manufacture final product. With these observations it has already been held by this Tribunal that there are no justifiable reasons to deny the Cenvat Credit nor to impose penalty upon the appellants. The similar order has also been passed by this Tribunal in Final Order No.51800 - 51808/2018 dated 11th May, 2018 vide which the orders passed against the appellants on similar set of facts and circumstances were set aside. In that order also it was observed by the Tribunal that Departments entire case is solely based on the statement of Amit Gupta and other transporters for which no cross-examination was provided. As already discussed above, the only differentiating fact for the present case is that both the said persons have duly been cross-examined recording a clear retraction of their earlier statements.
13. With regard to the payments by Cheque also the Tribunal has observed that the Revenue's allegation of receiving the payments back in cash is not sustainable, for want of any evidence to that effect. Though some cash was seized from the premises of Amit Gupta but there is no connecting document produced by the Department in evidence to show that the said cash pertains to the impugned three invoices. The said decisions were announced in following cases:-
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(i) M/s. Moral Alloys Pvt. Ltd., M/s. Unnati Alloys Pvt. Ltd. - Final Order No. 52055-52056/2018 -
SM dated 29.05.2018.
(ii) Synergy Steel Pvt. Ltd. vs. CGST & CCE, Alwar -
Final Order No. 50673/2019 dated 15.03.2019;
(iii) Gian Castings Pvt. Ltd. Vs. CCE, Chandigarh -
2015 (319) ELT 339 (Tri.- Del.).
14. All these decisions are based on same set of investigations and same evidences stand referred to as are referred in the present case. The present case is at a better footing having cross-examination in the form of retraction of examination - in- chief.
15. In view of the totality of above discussion, the findings in the order under challenge are held to be nothing but presumptive. There is observed absolute ignorance of the statement in cross- examination of alleged kin-pin Shri Amit Gupta and the transporter Shri Sanjeev Maggu. There is no other relevant evidence to prove the Departments case. Rather there is statement of Shri D.P. Sharma, Senior Manager of M/s. Aggarwal Metals Pvt. Ltd. as was reorded on 24.05.2017 which is relevant w.r.t. the impugned three invoices of M/s. V.K. Enterprises. He specifically deposed that M/s. Agrawal Metals used to purchase copper scrap from V.K. Enterprises against the payments either by RTGS or by Cheques. He has outrighly denied the invoices to be 14 E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] mere cenvatable without delivery of goods. He also denied receiving any cash from M/s.V.K. Enterprises of the amount sent by them through RTGS/Cheque. This deposition clearly falsifies the presumptive alleged modus-operandis.
16. Law has been settled that mere statements are not sufficient to prove clandestine removal. Hon'ble High Court of Allahabad in the case of Continental Cement Co. Vs. Union of India reported as 2014 (309) ELT 411 (Allahabad) had earlier laid down the criteria of investigation to prove the allegation of clandestine sale in following words:
"Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects:
(i) To find out the excess production details.
(ii) To find out whether the excess raw materials have been purchased.
(iii) To find out the dispatch particulars from the regular transporters.
(iv) To find out the realization of sale proceeds.
(v) To find out finished product receipt details from regular dealers/buyers.
(vi) To find out the excess power consumptions."15
E / 50764, 50765, 50885, 50886 & 50910/2020 [SM] Admittedly, there is no other evidence on record so as to relate to the clandestine activities of the assessee.
17. The order under challenge is accordingly, held to be not sustainable, same is hereby set aside. As a result, all the appeals stand allowed.
[Order pronounced in the open Court on 22.12.2021] (RACHNA GUPTA) MEMBER (JUDICIAL) Anita