M/s. Ashirwad Foundries Private Limited And Anr. @Hash Commissioner Of CGST And Central Excise, Howrah Commissionerate

The appellants have filed the present appeals against Order-in-Original No.31/COMMR/CGST & CE/HWH/Adjn/2017-18 dated 28.12.2017 passed

by Commissioner of Central Tax, CGST & C.Ex., Howrah CGST Commissionerate.

Excise Appeal No.76130 of 2018

Briefly stated, the facts of the case are that the appellant company is engaged in the manufacture of CI castings classifiable under chapter 73 of the

First Schedule to the Central Excise Tariff Act, 1985. Major raw materials for manufacture of CI castings are Pig Iron, Hard Coke and Lime Stone.

A search was conducted by the officers of Anti-Evasion Unit at the factory premises of the appellant company on 05.08.2015. It was found that

purchases have been made directly or through dealer namely M/s.Hari Om Udyog and M/s.Maa Parwati Engineering & Casting against

manufacturers’ invoices of M/s.A.S. Infratel Pvt.Ltd., M/s.Ganesh Udyog, M/s.Ganpati Enterprises and M/s.OHM Metals and Engineering

Corporation. Statements of the Manager of the appellant company Shri Krishna Murari Upadhyay, Shri Ashoke Kanti Kar and the Director Shri

Shankar Lal Agarwal were recorded on various dates. Thereafter the documents were scrutinized and the department made investigation with respect

to transportation of goods at the database VAHAN (hhtps://vahan.nic.in), wherein following details were found:-

(a) 8 vehicles with respect to 24 invoices were found non-existent in the database.

(b) In respect of 234 consignments of Pig Iron, the owners of 9 vehicles denied transportation by written communications.

(c) In respect of 4 vehicles involving 7 invoices, they were found to be ‘Light Goods Vehicle’ on the VAHAN database.

(d) Similarly in respect of 4 vehicles involving 13 invoices, they were found to be ‘Tractor and Trailer’ in VAHAN database.

(e) 5 vehicles involving 7 invoices were found to be ‘3 wheeler, two wheeler, Bus and Moped’ in VAHAN database.

(f) Some letters issued to the transporters as per the addresses available in VAHAN database were returned as insufficient address.

Based on the above observations, the department was of the view that the transactions in respect of the above consignments were either fake or

fictitious.

Further statement of Shri Ajay Sharma, Proprietor of M/s.Jai Mata Enterprises, Jamshedpur, Shri Ajay Kumar Sharma, Proprietor of M/s.Hari Om

Steel, Jamshedpur and Shri Dharmavir Kumar, Director of M/s.A.S.Infratel Pvt.Ltd. were recorded by the officers of DGCEI, Jamshedpur wherein it

was stated that there was no production in these firms.

Based on the above investigation, a show cause notice dated 18.05.2017 was issued alleging wrong availment of Cenvat Credit and for recovery of

the same along with interest and for imposition of penalty. The adjudicating authority vide the impugned order confirmed the demand of Cenvat Credit

totaling to Rs.5,57,78,466/- along with interest and imposed a penalty of equal amount under Rule 15(2) of Cenvat Credit Rules, 2004 read with section

11AC of the Central Excise Act, 1944 and Rule 25 of the Central Excise Rules, 2002 read with section 174(2) of Central Goods and Services Tax

Act, 2017 and a penalty of Rs.2.00 Crores was imposed on the Director Shri Shankar Lal Agarwal. Hence the present appeals before the Tribunal.

The learned Counsel appearing on behalf of the appellants submitted that during the financial year 2013-14 and 2014-15, the appellant company

availed Cenvat Credit on 24,775 MT of raw materials and manufactured 22401 MT of finished products and removed 20,728 MT (18,689 MT cleared

on payment of Central Excise duty of Rs.8.94 Crores and 2,039 MT of goods were exported under bond). It has been alleged in the show cause

notice that out of total quantity of 24,775 MT, the appellant company availed illegal Cenvat Credit on 14,992 MT without receiving any goods i.e.

appellant received 9,782 MT raw materials only. The learned Counsel submitted that if the case of the department is accepted, then it is not possible

for the appellant to manufacture 22,401 MT of finished goods from 9,782 MT of raw materials. It is his submission that this point was categorically

placed before the learned Commissioner, however, no findings have been given by him in this regard. It is also submitted that it is not the case of the

department that the appellant company had arranged such quantum of inputs from alternate sources and also no evidence have been brought on

record to support this assumption. The above facts clearly shows that the appellant has duly received all goods and rightfully taken Cenvat credit on

the same, which have been duly manufactured and removed on payment of duty [which has been accepted by the department] or exported, as the

case may be. In support of his submissions, the learned Counsel relied upon the decision of the Tribunal in the case of Modern Ex-Serviceman Engg.

Co.P.Ltd. vs. CCE, Panchkula [2014 (304) ELT 298 (Tri.-Del.)].

It was submitted that, during the course of visit by the officers of the Central Excise at the premises of the appellant, neither incriminating

documents were recovered nor any shortage/excess of raw materials/finished goods were found, which clearly shows that the appellant were duly

following the provisions of the Central Excise Act, 1944 and rules made thereunder. If the appellant is taking the credit on fake invoices, then some

incriminating documents or shortages/excess were bound to be recovered or found, however, in the present case, nothing was recovered or found,

which clearly shows that the allegations of the department is not sustainable in the eyes of law.

It was submitted that the statement recorded under Section 14 of the Act cannot be relied upon as evidence unless the provisions of Section 9D of

the Act has been followed. The statements of Sh. Krishna Murari Upadhyay (05.08.2015), Sh. Ashoke Kanti Kar (05.08.2015), Sh. Shankar Lal

Agarwal (07.08.2015 & 13.08.2015), Sh. Ajay Kumar Sharma, Prop. of Jai Mata Di Enterprises (07.07.2014), Sh. Ajay Kumar Sharma. Prop. of M/s

Hari Om Steel (15.07.2014) and Sh. Dharmavir Kumar, Director of M/s A.S. Infratel Pvt. Ltd. (19.09.2014) were recorded under the provisions of

Section 14 of the Act, however, the learned Adjudicating Authority has not followed the provisions of Section 9D of the Act, therefore, the said

statements cannot be relied as an evidence and have to be eschewed from evidence. The appellant would like to rely upon the judgement of Hi-Tech

Abrasives Ltd. Vs. CCE&C, Raipur, 2018 (362) ELT 961 (Chhattisgarh), wherein the Hon’ble High Court of Chhattisgarh, in similar issue, held

that statements recorded under Section 14 of the Act cannot be relied upon as evidence without following the rigor of Section 9D of the Act. It has

been further held that the provisions of Section 9D is mandatory in nature. It was also submitted that, similar view has been taken by the Hon’ble

High Courts and the Larger Bench of the Tribunal also as mentioned below:-

i. G-Tech Industries Vs UOI, 2016 (339) ELT 209 (P&H).

ii. Final Order No. 62244-62245 of 2018 dated 23.04.18 in the case of Bhupinder Steel Pvt. Ltd. Vs. CCE, Delhi-IV, in Appeal No. E/2328/09 and

E/2617/09 passed by Larger Bench of this Hon’ble Tribunal.

iii. CCE, Delhi-I Vs. Kuber Tobacco India Ltd, 2016 (338) ELT 113 (Tri-Del.)

iv. MSP Sponge Iron Ltd Vs Commissioner of CGST, Central Excise, 2020- TIOL-523-CESTAT-KOL

It was submitted that, in view of the settled law and facts of the present case, the aforementioned statements, cannot be relied upon as evidence and

have to be eschewed from evidence.

It was submitted that, even otherwise, in their statements Sh. Krishna Murari Upadhyay (05.08.2015), Sh. Ashoke Kanti Kar (05.08.2015), Sh.

Shankar Lal Agarwal (07.08.2015 & 13.08.2015), have clearly stated that they have received the goods under the cover of invoices and rightly taken

the Cenvat credit. It was further submitted that, the allegations of the department that, Sh. Shankar Lal Agarwal has admitted everything in his

statement, is wrong appreciation of the said statement and cannot be relied upon. The learned Advocate further submitted that statements of Sh. Ajay

Kumar Sharma, Prop. of Jai Mata Di Enterprises (07.07.2014), Sh. Ajay Kumar Sharma. Prop. of M/s Hari Om Steel (15.07.2014) and Sh.

Dharmavir Kumar, Director of M/s A.S. Infratel Pvt. Ltd. (19.09.2014) have been recorded by the officers of DGCEI, Jamshedpur and the

statements of these persons have not been recorded by officers investigating the case of the appellant. It is submitted that no cross-examination has

been allowed by the learned Commissioner, therefore, cannot be relied upon as evidence in view of the judgment of Hon’ble Supreme Court of

India in the case of Andaman Timber Industries Vs CCE, Kolkata-II, 2015 (324) ELT 641 (SC).

He further submitted that the department has neither confronted the statements of dealers nor investigation conducted at the end of the transporters to

Sh. Shankar Lal Agarwal nor the employees of the appellant, inasmuch as they have not put any part of the investigation to the director and

employees of the appellant.

It was submitted that, the investigation conducted by the department at the end of the transporter by searching the vehicles from the site

‘www.vahan.nic.in’ is an evidence which cannot be relied upon inasmuch as by the said evidence, the department is fastening the liability

against the appellant, especially when the department could have investigated from the concerned State RTO in order to get the details of the truck

owners. This exercise has not been done in the present case, thus, the said evidence cannot be relied upon in order to deny the lawful credit availed by

the appellant.

It was submitted that, the department has denied the credit on 912 consignments, out of which the department has allegedly found discrepancy in

285 consignments based on the website www.vahan.nic.in. 234 consignments (involving 9 vehicles) out of the above 285 consignments, on inquiry, the

owners of 9 vehicles denied transportation by sending their letters (Annexure L-1 to L-9) to the department. It is very strange to note that, all these 9

letters sent by the vehicle owners are stereotyped and similarly worded, which clearly shows that these have been dictated by the department and

cannot be relied upon. These letters relied upon by the department has no evidentiary value. It is further submitted that, no formal statement had been

recorded by the department under Section 14 of the Central Excise Act. The appellant also requested for the cross-examination of these persons,

however the same has been denied by the learned commissioner. It is well settled law that, statement has to be eschewed from evidence, if cross-

examination is not allowed.

It was further submitted that, with respect to 24 consignments, the VAHAN database shows ‘no vehicles found’, however, on perusal of

the said page, it has been written that,

“… if the vehicle details are not found then it is possible that… Â

· Wrongly entered combination of parameters;

· Vehicle details are not digitized by Registering Authority;

· Due to Network failure the data may not reach on National Registerâ€​

It was submitted that, when there is even one possibility that, Vehicle details are not digitized by Registering Authority, then it was necessary for the

department to investigate via proper channel i.e. by summoning the officers of the RTO with relevant records or taking records from RTO, which has

not been done in the present case. The aforesaid evidences cannot be relied upon as evidence. With respect to the other 27 invoices, wherein

department found Light Good vehicles, it is submitted that they should have also investigated from the concerned RTO, which has not been done in the

present case.

It was further submitted that, the allegation of the department with respect to remaining invoices, further letters were issued to remaining

transporters as per addresses mentioned in VAHAN database, however the same were retuned as ‘insufficient address’. No evidence

whatsoever has been relied upon by the department to show whether any letters are sent and moreover, the said allegation of the department proves

that the data present on VAHAN website is not reliable and had to be verified from concerned RTO. It was further submitted that, the department is

not disputing that these transporters were truck owners. Denial of Cenvat credit mechanically is not sustainable in the eyes of law.

It was further submitted that the department is alleging the nonexistence of premises of manufacturer/dealers, relying solely upon the alert

circulars issued by the different commissionarêtes. It was submitted that, in the present case, the department has neither relied upon nor stated in the

SCN about the Panchnama drawn at the concerned premises. If the said evidences have not been relied upon, then there is no material for the

appellant to controvert the same, which is in clear violation of the principle of natural justice. It was further submitted that, it is well settled law that,

merely on the basis of alert circulars, it cannot be said that particular premises are nonexistent. That, there is no dispute that, these manufacturer had

issued the invoices and paid the Central Excise duty to the exchequer, on which Cenvat credit has been taken by the appellant, thus causing no loss to

exchequer, therefore, the Cenvat credit has been rightly availed by the appellant. It was further submitted that, when the department is accepting the

duty then it cannot be said that they are non-existent.

It was submitted that, the appellant has taken all reasonable steps as mentioned in Rule 9 of the Cenvat Credit Rules, therefore, the denial of

Cenvat credit is wrong and liable to be set aside. The appellant assessee produced duty paid invoices under cover of which goods received in the

factory, showing names of manufacturer and supplier thereon and weighment slips produced evidencing receipt of goods and further all payments

have been made through the banking channels and the goods received have been duly entered into the RG23 register. The appellant has also paid the

Service Tax under RCM on freight expenses incurred by them for transportation of raw materials under the category of GTA and ST-3 returns were

also filed. It was further submitted there is neither allegations nor evidence for flow back of money. This clearly shows that, the appellant has taken all

reasonable precautions as prescribed in the Cenvat Credit Rules. There is no ground to doubt that these raw materials have been used in the

manufacture of finished goods and further removed on payment of duty.

It was submitted that, the department has not investigated at the end of the broker also, inasmuch they have also not discharged the burden of

proof. It is further submitted that the department is duty bound to investigate and bring on record cogent and positive evidence, which is absent in the

present case.

The appellant placed reliance on the following judgements to support its case:-

(i) CCE, Kanpur Vs Juhi Alloys, 2013 (296) ELT 533 (Tri-Del.)

(ii) CCE, Kanpur Vs Juhi Alloys, 2014 (302) ELT 487 (All.)

(iii) Nidhi Metal Auto Component P. Ltd. Vs CCE, Delhi-IV, 2016 (343) ELT 576 (Tri-Del.)

(iv) Ashok Sharma & Ors. Vs CCE, Raipur, 2019-TIOL-3405-CESTATDEL

(v) CCE Vs Tata Motors Ltd, 2013 (294) ELT 394 (Jhar.)

It was further submitted that, merely deposit of money at the time of investigation would not amount to acceptance of any allegations as mentioned

in the SCN. It is well settled law that, payment of money at the time of investigation would be treated as a deposit under protest. The appellant would

like to place reliance on the following judgements to support its contention:-

i. Bayshore Glass Trading Pvt. Ltd. Vs CC, Kolkata, 2002 (148) ELT 1243 (Tri-Kol.)

ii. CCE, Lucknow Vs Eveready Industries India Ltd., 2017 (357) ELT 11 (All.)

iii. CC, New Delhi Vs Ganesh Trading Co., 2013 (297) ELT 547 (Tri)

It was submitted that, if the denial of Cenvat credit is not sustainable, then the interest and penalty are liable to be set aside on this ground alone.

The penalty imposed on the Director of the appellant is also liable to be set aside.

The learned Authorised Representative appearing on behalf of the respondent, reiterated the findings of the impugned order and submitted that the

impugned order passed by the learned Commissioner is a well-reasoned order and requires no interference.

Heard both sides through video conferencing and perused the appeal records.

We find that during the course of search at the factory premises of the appellant neither incriminating documents were recovered nor any

shortage/excess of raw materials/finished goods were found by the officers of the anti-evasion. The employees of the appellant in their statements

have clearly stated that they have physically received the goods and utilized in the manufacture of their final products.

We find that the statement recorded under Section 14 of the Central Excise Act, 1944 cannot be relied upon as evidence unless the provisions of

Section 9D of the Central Excise Act, 1944 has been followed as has been held by the judgement passed by the Hon’ble High Court of

Chhattisgarh in the case of Hi-Tech Abrasives Ltd. Vs. CCE&C, Raipur, (supra), which is binding on the Tribunal, in view of the principle of judicial

discipline. The Hon’ble High Court held as under:-

“9.5 Undoubtedly, the proceedings are quasi criminal in nature because it results in imposition of not only of duty but also of penalty and

in many cases, it may also lead to prosecution. The provisions contained in Section 9D, therefore, has to be construed strictly and held as

mandatory and not mere directory. Therefore, unless the substantive provisions contained in Section 9D are complied with, the statement

recorded during search and seizure operation by the Investigation Officers cannot be treated to be relevant piece of evidence on which a

finding could be based by the adjudicating authority. A rational, logical and fair interpretation of procedure clearly spells out that before the

statement is treated relevant and admissible under the law, the person is not only required to be present in the proceedings before the

adjudicating authority but the adjudicating authority is obliged under the law to examine him and form an opinion that having regard to the

circumstances of the case, the statement should be admitted in evidence in the interest of justice. Therefore, we would say that even mere

recording of statement is not enough but it has to be fully conscious application of mind by the adjudicating authority that the statement is

required to be admitted in the interest of justice. The rigor of this provision, therefore, could not be done away with by the adjudicating

authority, if at all, it was inclined to take into consideration the statement recorded earlier during investigation by the Investigation officers.

Indeed, without examination of the person as required under Section 9D and opinion formed as mandated under the law, the statement

recorded by the Investigation Officer would not constitute the relevant and admissible evidence/material at all and has to be ignored. We

have no hesitation to hold that the adjudicating officer as well as Customs, Excise and Service Tax Appellate Tribunal committed illegality

in placing reliance upon the statement of Director Narayan Prasad Tekriwal which was recorded during investigation when his examination

before the adjudicating authority in the proceedings instituted upon show cause notice was not recorded nor formation of an opinion that it

requires to be admitted in the interest of justice. In taking this view, we find support from the decision in the case of Ambica International v.

UOI rendered by the High Court of Punjab and Haryana.

XXX Â Â Â XXX Â Â Â XXX

Accordingly, on the first and second question of law, we hold that the statement of the Director could not be treated as relevant piece of

evidence nor could be relied upon without compliance of Section 9D of the Act. The two questions of law accordingly, stand answered in that

mannerâ€​

We further find that the Hon’ble High Court of Punjab and Haryana in the case of G-Tech Industries Vs UOI (supra) and the Larger Bench of

this Hon’ble Tribunal in the case of Bhupinder Steel Pvt. Ltd. Vs. CCE, Delhi-IV (supra) has taken the similar view.

In view of the above binding judgements, we find that the adjudicating authority is required to first conduct examination-in-chief of the witnesses

whose statement is relied upon by the department and then to form an opinion whether the statements of the witness is admissible in evidence with

respect to the facts and circumstances of the case and then only the witness shall be offered for crossexamination. We find that in the present case,

since no examinationin-chief has been conducted by the learned adjudicating authority, therefore the statements of witnesses are inadmissible in

evidence and are eschewed from evidence by following the judgements as mentioned above.

As far as investigation conducted by the department at the end of the transporters, we find that the details of the vehicles have been searched by

visiting the website ‘www.vahan.nic.in’, wherein the 9 vehicle owners have denied the transportation of goods. The learned Counsel for the

appellant has argued that, the department has not recorded the statements of these truck owners, however they have received the letter from them

which are stereotyped and similarly worded, therefore, no reliance can be placed on them especially when no cross-examination has been allowed by

the learned Adjudicating Authority. We agree with the submission of the appellant that these letters written by the truck owners cannot be relied upon

inasmuch these are similarly worded which creates doubt with respect to authenticity of these letters. We further find that the crossexamination of

these truck owners have also been denied by the learned Adjudicating Authority. The Hon’ble Apex Court in the case of Andaman Timber

Industries Vs CCE, Kolkata-II (supra) has held that if cross-examination is not allowed, then the said evidence cannot be relied upon. By following the

aforesaid judgement, we find that the said letters cannot be relied upon as evidence. We further find that with respect to certain vehicles which were

not found, the said page relied upon by the department clearly shows that one of the possibilities of vehicle not found is, ‘vehicles details not digitized

by registering authorities’, this clearly shows that the department has not made the investigation properly and they should have enquired from the

concerned RTO with respect to vehicles. Similarly, with respect to other infirmities like light goods vehicles or insufficient address, the department

should have investigated from the concerned RTO to verify the credentials. We also note that, the department has not confronted the aforementioned

evidences to the appellant, which further creates doubt about the said half-baked investigation conducted by the department. We therefore find that

the investigation conducted at the end of transporter is not reliable piece of evidence and cannot be used against the appellant as discussed above.

We find that the appellant has taken all reasonable steps as mentioned in Rule 9 of the Cenvat Credit Rules. The appellant has produced duty paid

invoices under cover of which goods were received in the factory, showing names of manufacturer and supplier thereon and produced weighment

slips evidencing receipt of goods. The payments have been made through the banking channels and the goods received have been duly entered into the

RG-23 register. The appellant has also paid the Service Tax under Reverse Charge Mechanism on freight expenses incurred by them for

transportation of raw materials under the category of GTA and ST-3 returns were also filed. That these raw materials have been used in the

manufacture of finished goods and further removed on payment of duty. We further find that there is no evidence adduced by the department to show

any flow back of money in the show cause notice. We find that the department is not disputing the fact that these dealers raised invoices giving all

particulars required to be given under the provisions of Cenvat Credit Rules in respect of materials supplied to the appellant. We further find that there

is no evidence in the show cause notice that goods are not duty paid.

The learned Counsel for the appellant brought to our notice and submitted that, during the disputed year i.e. F.Y. 2013-14 and 2014- 15, if the case

of the department is accepted, then it is not possible to manufacture 20728 MT of finished goods from 9782 MT of raw material, without showing any

evidence of alternate source of procurement of raw material. We agree with the said submission of the appellant, there is no evidence in the show

cause notice that the appellant has procured the raw material from some other alternate source. We further find that the appellant has paid Central

Excise duty of Rs.8.94 crores approximately on its finished goods and certain goods have also been exported. We find that this clearly shows that the

appellant has physically received the goods and utilized in the manufacture of its finished goods.

We find that the appellant have discharged its onus as required under Rule 9 of CCR, 2004 and as explained by the Hon’ble High Court of

Allahabad in the case of Commissioner of Central Excise and Service Tax Vs Juhi Alloys Limited (supra).

It is important to note that the department has neither confronted the statements of dealers nor investigation conducted at the end of the

transporters to Shri Shankar Lal Agarwal nor the employees of the appellant, which further weakens the case of the department inasmuch as that

they have not put any part of the investigation to the Director and employees of the appellant.

The investigation conducted by the department at the end of the transporter by searching the vehicles from the site ‘www.vahan.nic.in’ is

an evidence which cannot be relied upon inasmuch as by the said evidence, the department is fastening the liability against the appellant, especially

when the department could have investigated from the concerned State RTO in order to get the details of the truck owners. This exercise has not

been done in the present case, thus, the said evidence cannot be relied upon in order to deny the lawful credit availed by the appellant.

The department has denied the credit on 912 consignments, out of which the department has allegedly found discrepancy in 285 consignments

based on the website www.vahan.nic.in. 234 consignments (involving 9 vehicles) out of the above 285 consignments, on enquiry, the owners of 9

vehicles denied transportation by sending their letters (Annexure L-1 to L-9) to the department. It is very strange to note that, all these 9 letters sent

by the vehicle owners are stereotyped and similarly worded, and cannot be relied upon. These letters relied upon by the department has no evidentiary

value. It is further submitted that, no formal statement had been recorded by the department. The appellant also requested for the cross-examination

of these persons, however the same has been denied by the learned Commissioner. It is well settled law that, statement has to be eschewed from

evidence, if cross-examination is not allowed.

It is further submitted that, with respect to 24 consignments, the VAHAN database shows ‘no vehicles found’, however, on perusal of the

said page, it has been written that,

“………if the vehicle details are not found then it is possible that…………… Â

· Wrongly entered combination of parameters;

· Vehicle details are not digitized by Registering Authority; Â

· Due to Network failure the data may not reach on National Registerâ€​

When there is even one possibility that, Vehicle details are not digitized by Registering Authority, then it was necessary for the department to

investigate via proper channel i.e. by summoning the officers of the RTO with relevant records or taking records from RTO, which has not been done

in the present case. The aforesaid evidences cannot be relied upon as evidence. With respect to the other 27 invoices, wherein department found

Light Good vehicles, then they should have also investigated from the concerned RTO, which has not been done in the present case.

The allegation of the department with respect to remaining invoices, further letters were issued to remaining transporters as per addresses

mentioned in VAHAN database, however the same were returned as ‘insufficient address’. No evidence whatsoever has been relied upon by

the department to show whether any letters are sent and moreover, the said allegations of the department proves that the data present on VAHAN

website is not reliable and had to be verified from concerned RTO. The department is not disputing that these transporters were truck owners. Denial

of Cenvat credit mechanically is not sustainable in the eyes of law.

The department is alleging the non-existence of premises of manufacturer/dealers, relying solely upon the alert circulars issued by the different

Commissionerates. In the present case, the department has neither relied upon nor stated in the SCN about the Panchnama drawn at the concerned

premises. If the said evidences have not been relied upon, then there is no material for the appellant to controvert the same, which is in clear violation

of the principle of natural justice. It is well settled law that, merely on the basis of alert circulars, it cannot be said that particular premises are non-

existent. There is no dispute that, these manufacturer had issued the invoices and paid the Central Excise duty to the exchequer, on which Cenvat

credit has been taken by the appellant, thus causing no loss to the exchequer, therefore, the Cenvat credit has been rightly availed by the appellant.

When the department is accepting the duty then it cannot be said that they are non-existent.

The appellant has taken all reasonable steps as mentioned in Rule 9 of the Cenvat Credit Rules, therefore, the denial of Cenvat credit is wrong and

liable to be set aside. The appellant assessee produced duty paid invoices under cover of which goods were received in the factory, showing names of

manufacturer and supplier thereon and weighment slips produced evidencing receipt of goods and further all payments have been made through the

banking channels and the goods received have been duly entered into the RG-23 register. The appellant has also paid the Service Tax under RCM on

freight expenses incurred by them for transportation of raw materials under the category of GTA and ST-3 returns were also filed. We find that there

is neither allegations nor evidence for flow back of money. This clearly shows that, the appellant has taken all reasonable precautions as prescribed in

the Cenvat Credit Rules. There is no ground to doubt that these raw materials have been used in the manufacture of finished goods and further

removed on payment of duty.

The department has not investigated at the end of the broker also, inasmuch as they have also not discharged the burden of proof. The department

is duty bound to investigate and bring on record cogent and positive evidence, which is absent in the present case.

The appellant relied upon the following judgements to support their case:-

(i) CCE, Kanpur Vs. Juhi Alloys [2013 (296) ELT 533 (Tri-Del.)]

(ii) CCE, Kanpur Vs. Juhi Alloys [2014 (302) ELT 487 (All.)]

(iii) Nidhi Metal Auto Component Pv.Ltd. Vs. CCE, Delhi-IV [2016 (343) ELT 576 (Tri-Del.)]

(iv) Ashok Sharma & Ors. Vs. CCE, Raipur [2019-TIOL-3405-CESTAT-DEL]

(v) CCE Vs. Tata Motors Ltd. [2013 (294) ELT 394 (Jhar.)]

It is further submitted that, merely deposit of money at the time of investigation would not amount to acceptance of any allegations as mentioned in

the SCN. It is well settled law that, payment of money at the time of investigation would be treated as a deposit under protest. The appellant relied

upon the following judgements to support their contention:-

(i) Bayshore Glass Trading Pvt.Ltd. Vs. CC, Kolkata [2002 (148) ELT 1243 (Tri.-Kol.)]

(ii) CCE, Lucknow Vs. Eveready Industries India Ltd. [2017 (357) ELT 11(All.)]

(iii) CC, New Delhi Vs. Ganesh Trading Co. [2013 (297) ELT 547 (Tri)]

In view of the above, the impugned order cannot be sustained and is accordingly set aside. The appeal filed by the appellant is allowed with

consequential relief as per law.

We further note that, since we have allowed the appeal of the appellant-company on merits of the case with consequential relief, then penalty on

Sh. Shankar Lal Agarwal (Director of the company) cannot be sustained.

(Order pronounced in the open court on 16 December 2020.)