Custom, Excise & Service Tax Tribunal
M/S Askas Plastics Pvt. Ltd vs C.C.E. & S.T. Indore on 23 June, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. E/1211/2012-E[SM]
[Arising out of Order-In-Appeal No. IND/CEX/000/APP/04 & 05/2012 dated 17.01.2012 passed by CCE (Appeals) Indore]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, 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 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?
M/s Askas Plastics Pvt. Ltd. ...Appellant(s)
Vs.
C.C.E. & S.T. Indore Respondent(s)
Appearance:
Mr. Alok Bharthwal (Advocate) for the Appellant Mr. M.R. Sharma (DR) for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing/Decision 23.06.2016 Final Order No. 54026 /2016_ Per S. K. Mohanty:
Brief facts of the case are that the Appellant is engaged in the manufacture of Polythene Bags and Sheets etc., falling under Chapter 39 of the schedule to Central Excise Act, 1985. The Appellant avails the benefit of Cenvat credit of Central Excise duty paid on inputs and capital goods. The present dispute relates to availment of Cenvat credit on inputs namely, Plastic Granules for the period October 2005 to Dec 2007.
2.? For denying the benefit of Cenvat credit of Rs. 15,01,200/- and for imposing equivalent amount of penalty, the grounds in the show cause notice were that investigation was conducted against dealer, of which Shri Mukesh Sangla is the proprietor. M/s Signet Overseas Ltd. is also one of such company, whose director is Shri Mukesh Sangla. During investigation, records were seized and statements were recorded from various persons. Based on the records and statements, it was alleged that the firms owned by Shri Mukesh Sangla issued cenvatable invoices to Appellant firm without actual delivery of goods. The transporter Shri Vishal Agarwal also admitted that they did not transport any goods but supplied only lorry receipts. That Shri Paras Patidar, Marketing Manager also admitted that he purchased lorry receipt from the firms of Shri Vishal Agarwal on payment of commission of Rs. 100/-. That the Appellant paid the amount to M/s Signet Overseas in cheque and in turn, the said amount was returned back to them in cash as found from cash slips seized from Shri Kirti Kala, Cashier of M/s Signet Overseas Ltd. As entered in his laptop. On the basis of investigation, it was alleged that the Appellant firm has availed cenvat credit on the strength of invoices of M/s Haldia Petrochemicals and M/s Signet Overseas Ltd. without receipt of inputs namely, Plastic Granules without receipt of goods and diverting the goods to Indore Godown of M/s Signet Overseas Ltd.
3.?The above show cause notice was adjudicated by the ld. Additional Commissioner, Indore vide Order dated 30.06.2011, wherein he confirmed the proposed Cenvat demand along with interest and also imposed equal amount of penalty. In appeal, the Commissioner (Appeals) has upheld the demand confirmed in the adjudication order. Hence, this present appeal is before this Tribunal.
4. The Ld. Counsel appearing for the Appellant submits that the documents and statements relied upon for confirmation of demand belong to the third party i.e. M/s Signet Overseas Ltd and transporter without any corroboration from Appellants record. That The cash slips and the laptop seized from the residential premises of Shri Kirti Kala and the records seized from M/s SOL or its associated persons relied upon were not maintained in the regular course of business and were private documents with no connection with the Appellant. The cash transactions shown in the slips and ledger retrieved from the laptop of Kirti Kala cannot be said to be genuine, unless the same is corroborated by the receipts shown in the Books of the Appellant. That Shri Kirti Kala in his statement did not name any person of the Appellant Company who has collected the cash. That no cash was ever dealt with by the Appellant company on account of alleged bogus invoices and no reliance can be placed upon the documents/ records seized from the residential premises of employee of M/s SOL and their statements cannot be relied upon, since the same are not corroborated with any evidence from the Appellants side.
4.1 That no incriminating nature of record/papers/ documents supporting the allegation of the revenue was found in the factory of Appellant. That all evidences relied upon are from the persons associated with SOL. The cash slips and entries found in laptop of Shri Kirti Kala were not maintained in the regular course of business and the demand cannot be confirmed on the basis of these records. The demands made on the basis of records of third party are not sustainable against them. He relies upon the judgment of Tribunal in the case of M/s TGL Poshak Corporation Vs. CCE, Hyderabad-2002(140) ELT 187 (Tri-Chennai), Rhino Rubbers Pvt. Ltd. Vs. CCE, Bangalore- 1996(85) ELT 260 (Tribunal), CCE, Coimbatore Vs. Rajaguru Spinning Mills (P) Ltd.-2009 (243) ELT 280 (Tri. Chennai) and Rutvi Steel & Alloys Vs. CCE, Rajkot- 2009 (243) ELT 154(Tri- Ahmd).
4.2 That the credit has been denied on 24 consignments. However, out of these 24 consignments, 22 consignments were received directly from M/s Haldia Petrochemicals on their invoice and the goods were transported by different transporters from Haldia to Appellants factory by the transporters employed by the said supplier. No statements were recorded from any of the supplier/ employee or driver, to show that the goods were not delivered in the Appellants factory and the same were diverted elsewhere. Therefore, the impugned orders confirming the demand based upon the so called ledger and records as well as statements of the persons related with M/s SOL cannot be relied upon to allege that the polymers were not received in the Appellants factory.
4.3 That statement of Shri Vishal Agarwal, transporter has been relied upon, wherein he stated that he has sold bilty in cash at the rate of Rs. 100/-. However, since the goods were transported by transporters appointed by M/s Haldia and not by M/s BGFL or M/s BBTC owned or operated by Shri Vishal Agarwal, there is no ground to allege non-transportation of the alleged goods. M/s BGFL and M/s BBTC has transported only two consignments. That even the reliance placed upon the statement of Shri Vishal Agarwal is not correct in as much as in his statement it has been recorded that he had issued lorry receipt only after talking to driver of truck and charged Rs. 100/- as his commission. This clearly shows that the goods were actually transported.
4.4 That during investigation the officers resumed input invoices, R.G.1 Register, Raw material Register, Finished goods register, RG23A Part I and Part II Register from the Appellants factory. The goods were found fully accounted for in the records and issued for production. No discrepancy in records were found and the said records/ documents maintained in regular course of business were not alleged or held to be concocted/ fabricated. That the payment for purchases was made through Bank channel and was recorded in the Books of Accounts of the Appellant. That in such a case, it cannot be alleged that the Appellant has not received the subject inputs and availed any illegal or wrong credit. The impugned order has not given any evidence which can show that these records are false or not authentic. In such a case, only on the basis of record and statement of third party i.e Shri Mukesh Sangla it cannot be alleged that the Appellant has availed credit without physically receiving the inputs or the said inputs were diverted out of the factory. Thus, the duty demand cannot be sustained. He relies upon the following judgments:
(i) RINOX ENGINEERING Vs. CCE, CHANDIGARH 2014 (304) ELT 436 (TRI)
(ii) CCE, LUDHIANA Vs. PEE JAY INTERNATIONAL LTD.
2010 (255) ELT 418 (TRI DEL)
(iii) CCE, LUHIANA Vs. PARMATMA JAT. SINGH ALLOYS P. LTD.
2011 (266) ELT 67 (TRI)
(iv) MONARCH METALS P. LTD. Vs. CCE, AHMEDABAD 2000 (261) ELT 508 (TRI AHD) 4.5 He submits that there is no evidence that the cenvat credit was availed without receipt of inputs by Appellant or that the goods from the factory were diverted elsewhere. That the lower authorities failed to appreciate that in the statement the Director has stated that since the goods were received by them, they availed the cenvat credit.
4.6 He submits that in the same investigation against M/s Signet Overseas Ltd. and as like Appellant, show cause notices were also issued to other assesses on the same ground to disallow the cenvat credit and penalty. That in all such cases the demands was dropped by Commissioner (Appeals). In case of one of the assessee i.e M/s Narmada Extrusions Ltd., Pithampur, the revenue has accepted the order of the Commissioner (Appeals) and no further appeal was filed. However, in case of three other assesses namely, M/s Parag Pentachem, M/s Rajshree Plastiwood and M/s Kisan Extrusions Ltd., the revenue filed appeals against the order of the Commissioner (Appeals). All such appeals filed by the revenue were dismissed by the Tribunal. Further, the demand confirmed against M/s Tulsi Extrusions was set aside by the Tribunal. He submits that in view of the Orders passed by the Tribunal and Commissioner (Appeals), it is very much clear that the allegation against the Appellant are not sustainable as the cases arising from the same investigation have been set aside.
5. On the other hand, the Ld. AR appearing for the revenue reiterates the findings recorded in the impugned order.
6. Heard the ld. Counsel for both the sides and perused the records.
7. I find that the demand is made on the basis of records and statements of employees/ Director of M/s Signet Overseas Ltd. I find that the document and data relied upon was maintained mainly by Shri Kirti Kala, Cashier of M/s Signet Overseas Ltd. I find that these records were not maintained by M/s Signet Overseas Ltd. in regular course of business. Further, I find that the documents/ records relied upon by the revenue pertain to M/s Signet Overseas Ltd. have not been corroborated from any independent evidences. The same is nowhere corroborating with any evidence from the Appellants record or documents. The investigation has not brought any incriminating documents from the Appellant. Though it is alleged that the Appellant firm paid amounts through cheque and in turn took cash from M/s Signet Overseas Ltd., I find that no evidence is appearing on record which can show Appellants involvement in such transactions. I, therefore find that demand cannot be made against Appellant merely on basis of third party records as held in case of M/s TGL POSHAK CORPORATION Vs. CCE, HYDERABAD 2002 (140) ELT 187 and CCE, LUDHIANA Vs. PARMATMA SINGH JATINDER SINGH ALLOYS PVT. LTD. 2011 (266) ELT 67 (TRI).
8. The show cause notice has relied upon the statement of transporter Shri Vishal Agarwal the person looking after M/s BGFL and M/s BBTC that he did not transported any goods but only issued bilties by charging Rs. 100/- as commission. I find from his statement that he has issued bilties only when he talked to the drivers of vehicles transporting goods and thus the reliance cannot be placed upon his statement to confirm the demand against the Appellants firm. I also find that the said transporter is concerned only with two consignments on which credit is sought to be allowed. I find that out of 24 consignments, 22 consignments were transported by different transporters directly from Haldia to Appellants unit. None of these transporters have been questioned to ascertain whether any goods were diverted enroute to Appellant Unit. In absence of any investigation to that effect, I am of the view that the goods were received by the Appellant unit. Further, I find that the director of Appellant unit Shri Anil Jhanwar in his statement has clearly stated that the credit was availed as the goods were received in the factory. Thus, I find that there is no inculpatory evidence against the Appellant firm to show that they have availed ineligible credit.
9. I further find that in the similar set of facts, records and investigation, the demands against M/s Narmada Extrusions Ltd., Pithampur were set aside by the Commissioner (Appeals) vide order dated 21.02.2013 and the same was not appealed against by the Revenue. Further, in case of other assesses namely, M/s Parag Pentachem and M/s Rajshree Plastiwood, the Order-in-appeal exonerating assesses, though were appealed against by the Revenue, but the appeals were dismissed by the Tribunal vide Final Order No. A/51910-51915/2015 dt. 17.06.2015. In another case arising from the same investigation and records the appeal of the revenue against M/s Kisan Extrusions Ltd. was dismissed by the Tribunal vide Final Order No. A/50982-50985/2016 dt. 15.02.2016. Yet in another case arising out of the same investigation, the demands against M/s Tulsi Extrusions were set aside by the Tribunal vide Final Order dt. 11.08.2015. Thus, in view of my above findings and the orders passed by the co-ordinate bench of the Tribunal, I am of the view that confirmation of demand and imposition of penalty by the authorities below are not justified. Therefore, the impugned order is set aside and the appeal is allowed with consequential reliefs in favour of Appellant.
(Operative portion of the order pronounced in open court) (S. K. Mohanty) Member(Judicial) Neha 7 | Page E/1211/2012-E[SM]