Custom, Excise & Service Tax Tribunal
Cce, Delhi-Iii vs M/S. Overseas Trading Corporation on 4 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 1273 OF 2007-SM [Arising out of Order-in-Appeal No. 44/SSS/GGN/07 dated 19.3.2007 passed by the Commissioner (Appeals), Central Excise, Delhi-III, Gurgaon] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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? CCE, Delhi-III Appellant Vs. M/s. Overseas Trading Corporation, Respondent
Appearance:
Shri R.K. Saini, D.R. for the Revenue;
Smt. Reena Khair, Advocate for the respondents Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 4th June, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
The relevant facts of the case, in brief, are that the respondents are engaged in the manufacture of Brass/ Copper/ Zinc sheets and availed Modvat benefit. In January, 2001 the Central Excise officers during investigation against one Shri R.K. Gupta and other 3 concerns, namely, M/s. R.K. Enterprises, M/s. Hindustan Metals and M/s. United India Company, registered dealers found that they were issuing fraudulent invoices to pass Modvat credit without delivering goods. On the basis of the statement of Shri R.K. Gupta and a Transporter the original authority confirmed the demand of duty of Rs. 86,379/- along with interest and imposed penalty of equal amount on the respondents. The Commissioner (Appeals) set aside the adjudication order. Hence, the Revenue filed this appeal.
2. Learned D.R. on behalf of the Revenue reiterates the grounds of appeal. He submits that the Commissioner (Appeals) proceeded on the basis of statement of Shri R.K. Gupta, whereby he stated that the cases wherein supply of less than 6 M.T. was made genuine. He further submits that the Commissioner (Appeals) have totally over-looked the statement of the Transporters who said that the goods were not delivered.
3. Learned Advocate reiterates the findings of the Commissioner (Appeals). She submits that the demand was raised on the basis of the statement of Shri R.K. Gupta which cannot be read in piece-meal. She further submits that the Tribunal on the same issue, after considering the statement of Shri R.K. Gupta set aside the demand in respect of supplies 6 M.T. orders as under:-
(a) Laxmi Wire vs. CCE, Delhi 2006 (193) ELT 511 (Tri.-Del.)
(b) Garima Enterprises (P) Ltd. vs. CCE, Delhi 2005 (182) ELT 106 (Tri.-Del.)
4. After hearing both sides and on perusal of the records, I find that demand was raised on the basis of investigation against registered dealers. Shri R.K. Gupta, registered dealer in his statement stated that supplies of less than 6 M.T. or less are genuine transactions and the supplies of more than 6 M.T. are bogus. It is seen that the Commissioner (Appeals) set aside the adjudication order after considering the statement of Shri R.K. Gupta and corroborated the evidences. The relevant portion of the order of the Commissioner (Appeals) is reproduced below:-
10. The Appellant have also cited certain invoices, which bear the stamp of the octroi and sales tax authority. The adjudicating authority has held that these stamps must be fraudulent and have been put by R.K. Gupta. I find that it is not possible to come to such a conclusion without any verification in this regard from the sales tax and other statutory authorities.
11. There are also a number of statements of the supplier of inputs, who have stated that they physically supplied the inputs to the firms of R.K. Gupta on payment of duty. These statements are totally variance with the statement of R.K. Gupta, who has stated that in the case of bogus transaction, neither the materials were physically received by him nor further sold to its customers.
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14. The Appellants have emphasized before the adjudicating authority for the cross examination of Shri R.K. Gupta and Shri Harphal Singh, Driver. I find that the adjudicating authority should have allowed the cross examination as requested by the Appellant in view of the fact that the said statement was recorded at the back of the Appellant. The purpose of cross examination is always to test the correctness of the testimony made by witness at the back of other party.
5. It is seen that Single Member Bench of the Tribunal in the case of Laxmi Wire (supra) allowed the credit to other manufacturer of final product on the basis of invoices issued by Shri R.K. Gupta. The Division Bench of the Tribunal in the case of Garima Enterprises (P) Ltd. (supra) allowed the credit to the manufacturer of final product availed on the strength of the invoice of Shri R.K. Gupta. The relevant portion of the decision of the Tribunal in the case of Garima Enterprises (P) Ltd. (supra) is as under:-
5.We have considered the submissions of both the sides. The facts which are not in dispute are that both the dealers M/s. R.K. Enterprises and Hindustan Metals are registered with the Central Excise Department as dealers and they had issued invoices to the Appellants for sale of copper rods. The question involved is whether the goods in question were actually sold or only invoices were provided to the Appellants for the purpose of availing the MODVAT credit. The entire case of the Department is mainly based on the statement of Shri R.K. Gupta, Proprietor of M/s. R.K. Enterprises, as no statement of Shri Deepak Kumar Gupta, Proprietor of M/s. Hindustan Metal, seems to have been recorded. In his statement, Shri R.K. Gupta has deposed that he trades in non-ferrous metals having a staff of four persons. He has given the names of firms whom he purchases the metals from as well as the name of his customers whom the metals are sold to by him. He has also mentioned that both payments are made and received by him through cheques. He has admitted that G.R. books were got printed by him and the transport companies did not exist and he was issuing bogus modvatable invoices about 50 % of all invoices issued by him. He has also stated in his statement that where the quantity delivered on an invoice through a tempo is more than 6 tons, the transaction is bogus and that he used to receive back cash from his suppliers and in turn he used to give the said cash to his customers. The statement of Shri R.K. Gupta reveals that besides issuing bogus modvatable invoices, he was also issuing genuine invoices where the goods were actually supplied to the customers. The learned Advocate has rightly contended that the said statement is very general and nowhere specifically mentions that the invoices issued in the name of the Appellants were bogus. The Revenue has also not rebutted the submissions made by the Appellants that they had never received any invoice for more than 6 tons and as such even as per the statement of Shri R.K. Gupta, the supply to the Appellants were not bogus. The Revenue has also not controverted the contention of the Appellants that they were sending the copper rods to their job workers for conversion and paying the conversion charges to the job worker. The Revenue has thus not succeeded in establishing that the Appellants did not receive the raw materials and received only modvatable invoices. Accordingly, we set aside the impugned Order and allow both the appeals.
6. On perusal of the decision of the Division Bench of the Tribunal in the case of Garima Enterprises (P) Ltd., I find that the present case is identical. The main contention of the learned D.R. is that the statement of Shri R.K. Gupta is partly not reliable. I am unable to accept the contention of the learned D.R. The Tribunal in the case of Bussiness Combines Ltd. vs. CCE, Nasik, reported in 2005 (198) ELT 67 (Tri.-Mum.) held that statement of witness has to be read and applied in entirety. In the case of Samsuddin Sheikh vs. Collector of Customs (Prev.), reported in 1990 (47) ELT 48 (Tri.) held that statement of witness if relied, should be relied upon as a whole and not in piecemeal. In view of that, I do not find any reason to interfere the order of the Commissioner (Appeals). Accordingly, appeal filed by the Revenue is rejected.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK