COMMISSIONER, CGST AND CENTRAL EXCISE Versus NARESH F. SHAH
Central Excise
2019 (1) TMI 821 – GUJARAT HIGH COURT – 2018 (362) E.L.T. 972 (Guj.)
GUJARAT HIGH COURT – HC
Dated:- 12-7-2018
R/Tax Appeal No. 741 of 2018 with R/Tax Appeal No. 742 of 2018
Central Excise
M.R. Shah and A.Y. Kogje, JJ.
Shri P.Y. Divyeshvar, for the Appellant.
JUDGMENT
[Judgment per : M.R. Shah, J. (Oral)]. – As common question of law and facts arises and as such one is with respect to the Company and another is with respect to the Director of the Company, both these Appeals are decided and disposed of together by this common order.
2. The facts leading to the present Tax Appeals in nutshell are as under;
2.1 Proceedings were initiated against the Company for recovery of Rs. 43,38,450/- on account of wrong availment of Cenvat Credit duty on Linear Alkyl Benzene (LAB) (hereinafter referred to as 'LAB'). It was alleged that LAB was not at all utilized as input in the final produ
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ded statement of Shri Vijay A. Vora, Excise Clerk of M/s. Ganesh Chem Tech that it did not contain LAB. I further find that the adjudicating authority has heavily relied on post facto opinion of Dr. Y.K. Agarwal, Director of School of Science, Gujarat University which based on technical literature of the final products manufactured by the appellants stating that LAB is not essential raw material/ingredient in the manufacture of their final products. I find that such opinion was obtained in some another case of the Commissionerate and not in the case of appellants & the copy of the opinion of Dr. Y.K. Agarwal, Director of School of Science, Gujarat University was also not given to the appellants in the interest of Principle of natural justice. The question for consideration in this case is if the initial confessional statements of the clerk and director of the appellants are sufficient evidence to prove serious charges of irregular availment of cenvat credit if there is no evidence othe
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receipt/acknowledgment on the body of LRs. He was having no records showing where the said tankers of LAB were unloaded practically. It is universal fact that the onus to prove irregular availment of Cenvat credit is on the part of Department. In view of the statement of dealer Shri Jayesh M. Bhimani & transporter Shri Ravindra M. Shah it cannot be disputed that LAB was not delivered by dealer Jayesh M. Bhimani to the appellants at Sr. No. 1 of the table above. The initial statement of Naresh F. Shah that he used to take payment by cheque & get back 98% by cash is also not reliable as there is no evidence to support this statement as investigation even did not confirm that there have been cash withdrawal by Shri Jayesh M. Bhimani from any of his accounts. I therefore hold that the Department has to prove with documentary evidences about diversion of 519.511 Mts. of LAB during the year 2001-02 to 2003-04 by the appellants or dealer after taking Cenvat credit thereon. The case of non us
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therefore, the adjudicating authority was not in a position to take the samples for chemical test. However, it is required to be noted that as such the matter was remanded to the learned Commissioner (Appeals) for the very purpose by specifically observing that the onus is on the Department to prove that the assessee wrongly availed the Cenvat Credit on the tax paid on LAB, which was used in the input of the final product, and therefore, unless and until the Department was able to prove that in the final product the LAB was not used/utilized at all, the Department was not justified in holding that the assessee wrongly availed the Cenvat Credit on LAB. So far as other circumstances are concerned, statement of other persons, which were earlier relied upon by the original adjudicating authority while passing the first order, were as such considered and dealt with by the Learned Commissioner (Appeals) and in fact the Learned Commissioner (Appeals) came to a conclusion on the basis of the
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