Custom, Excise & Service Tax Tribunal
M/S. Namo Alloys Pvt. Ltd vs Cce, Faridabad on 29 March, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:29.3.11
Date of decision:29.03.11
Excise Appeal No.1998 of 2009-SM (BR)
[Arising out of Order-in-Appeal No.51 & 52/CE/Appl./DLH-IV/2009 dated 1.5.2009 passed by the Commissioner of Central Excise (Appeals), Faridabad].
M/s. Namo Alloys Pvt. Ltd. Appellant
Vs.
CCE, Faridabad Respondent
For approval and signature:
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see CESTAT (Procedure) Rules, 1982.
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
Appearance: Rep. by Shri Y.K. Kumar, Advocate for the appellants.
Rep. by Ms. Rimjhim Prasad, SDR for the respondent.
CORAM: Honble Shri Rakesh Kumar, Member (Technical) Order No/Dated:29.03.2011 Per Rakesh Kumar The appellant are manufacturers of non-ferro metal ingots from scrap. The period of dispute in this case is September, 2003 and October, 2003. The appellants had taken Cenvat credit amounting to Rs.97,902/- on the basis of two invoices No.347 dated 24.09.2003 and No.393 dated 24.10.2003 issued by a registered dealer - M/s. M.S. Metals for imported copper scrap. As per the details given on these invoices, the copper scrap had been procured by M/s. M.S. Metals from M/s. Sulabh Impex who were the original importer and that the scrap supplied by M/s. M.S. Metal to the appellant was out of the stock of scrap received by M/s. M.S. Metal from Sulabh Impex under Invoice No.26 dated 23.9.2003 and Invoice No.43 dated 20.10.2003. On inquiry with Shri Rishabh Jain, Director of the appellant company, he claimed that he had received copper scrap in question, from M/s. M.S. Metal and on inquiry with Shri Sanjay Jain, Proprietor of M/s. M.S. Metal, he also claimed that the scrap supplied by him to the appellant, had been received by him from M/s. Sulabh Impex. On enquiry with Shri Sunil Kumar Mittal, Proprietor of Sulabh Impex, it appeared that no scrap had been supplied by M/s. Sulabh Impex and only invoices had been issued. In this regard, the department relies upon the statement of Shri Sunil Kumar Mittal of M/s. Sulabh Impex Inc. and also statement dated 15.05.2006 of Shri Lalit Kumar Seth of M/s. Sulabh Impex Inc., both of whom have stated that the scrap imported by M/s. Sulabh Impex Inc was being supplied to some other persons and that M/s. Sulabh Impex was only issuing invoices to various customers without supply of any material. It is on this basis that the department alleged that no material had been supplied under Invoice No.347 dated 24.09.2003 and No.393 dated 22.10.2003 issued to the appellant and as such these are bogus invoices. On this basis show cause notice dated 28.12.2006 was issued to the appellant for recovery of wrongly taken Cenvat credit amounting to Rs.97,902/- along with interest and also for imposition of penalty on them under Rule 13 of the Cenvat Credit Rules, 2002 read with Section 11 AC of the Central Excise Act. The show cause notice was adjudicated by the Asstt. Commissioner vide order-in-original dated 26.12.2007 by which Cenvat credit demand was confirmed along with interest and penalty of equal amount was imposed. On appeal to the Commissioner (Appeals), the Commissioner (Appeals) vide Order-in-appeal dated 1.5.2009 upheld the Asstt. Commissioners order. It is against this order that the present appeal has been filed,
2. Heard both the sides.
3. Shri Y. K. Kumar, Advocate, ld. Counsel for the appellants, pleaded that the entire case of the department is based on the statement of Shri Sunil Kumar Mittal, Proprietor of Sulabh Impex Inc. and statement of Shri Lalit Kumar of Sulabh Impex, that Shri Rishabh Jain, Director of the appellant company, in his statement had clearly stated that scrap had been received by their company under the Invoice No.347 dated 24.09.2003 and Invoice No.393 dated 22.102.2003 and similarly, Shri Sanjay Jain, Proprietor of M/s. M.S. Metals has also stated that the goods had been supplied under the invoices issued to the appellants, that no inquiry has been made by the department with the transporters in support of the allegation that no material has been supplied, that there is no allegation of financial flow back and no inquiry in this regard has been made, that in view of this, just on the basis of the statement of Shri Sunil Kumar Mittal and Shri Lalit Kumar Seth, it cannot be alleged that the appellants have not received any materials and had only received the invoices and that in view of this, the impugned order is not correct. He also pleaded that in any case, no penalty can be imposed on the appellants and in this regard, he relies upon the judgement of the Tribunal in the case of M/s. G.L. Metallica Pvt. Ltd. Vs. CCE, Jaipur-I reported in 2010 (262) ELT 995 (Tribunal-Delhi), wherein in similar circumstances in respect of the Cenvat credit availed by the appellant (M/s.M.S. Metals) on the basis of the invoices issued by M/s. Sulabh Impex Inc., while the denial of cenvat credit had been upheld, penalty imposed on the appellant had been set aside. He, therefore, pleaded that in view of this, the impugned order is not correct.
4. Ms. Rimjhim Prasad, ld. SDR defending the impugned order, pleaded that scrap, in question, supplied by M/s. M.S. Metal to the appellant had been received by M/s.M.S. Metal from M/s. Sulabh Impex Inc., that M/s. M.S. Metal, during the period of dispute was the consignment agent of M/s. Sulabh Impex Inc., that Shri Sunil Kumar Mittal, Proprietor of M/s. Sulabh Impex Inc. and Shri Lalit Kumar in their respective statements had categorically stated that the brass scrap imported in their name was never received by them and was received in the godown owned by Shri Narendera Aggarwal and that against the import documents, they had issued Cenvatable invoices but the goods did not accompany the invoices, that Shri Mittal also stated that while he used to receive the payment by cheque against the invoices issued by him, he used to return the amount in cash after deducting his commission, that in view of the categorical statements of Shri Sunil Kumar Mittal and Shri Lalit Kumar, it is clear that no material had been supplied by M/s. Sulabh Impex to M/s. M.S. Metal and hence, M/s. M.S. Metal could not have supplied any scrap to the appellant out of the stock, which according to the M/s. M.S. Metal had been received by them by M/s. Sulabh Impex. She, therefore, pleaded that the invoices were issued by M/s. M.S. Metal without any supply of materials and Cenvat credit had been rightly denied and penalty had been rightly imposed.
5. I have carefully considered the submission from both the sides and perused the records. The Cenvat credit in question had been taken by the appellant under Invoice No.2347 dated 24.09.2003 and No.393 dated 22.10.2003 issued by M/s. M.S. Metals registered dealer, and M/s. M.S. Metal in turn claimed to have received the scrap from M/s.Sulabh Impex, who was the importer. However, the proprietor of M/s. Sulabh Impex Shri Sunil Kumar Mittal and his employee Shri Lalit Kumar have clearly stated that the copper scrap imported were never received by them but used to be given to Shri Narendra Kumar Agarwal and he used to issue only cenvatable invoices without supply of any goods to the parties, who asked for such invoices and that for issuing such invoices, he used to take commission. Shri Sunil Kumar Mittal explained that though against the invoices issued to the customers, he used to receive the payments thorugh cheques, thereafter the amount used to be returned after deducting his commission. These statements of Shri Sunil Kumar Mittal and Shri Lalit Kumar have not been retracted by them and hence, in view of the judgment of the Honble Supreme Court in the case of Naresh J. Sukhawani Vs. Union of India reported in 1996 (83) ELT 258 (SC), these statements have to be treated as substantive evidence.
6. In view of this, I hold that the Commissioner (Appeals) has rightly held that no material was supplied by M/s. M.S. Metal to the appellant under the two invoices issued by them and hence Cenvat credit has been rightly denied to them. I, therefore, do not find any infirmity in the impugned order. The appeal is dismissed.
(Rakesh Kumar) Member (Technical) Ckp.
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