Order date – 22 November 2022

Facts –

• The Respondent, M/s Mittal Pigments Pvt. Ltd. are engaged in manufacture of various excisable products viz. Lead & Alloy Ingot, Lead Chloride etc.
• Department got an information that shri Amit Gupta was operating some registered dealer companies inter-alia namely (i) M/s Brilliant Metals (P) Ltd., New Delhi (ii) M/s Unnati Alloys (P) Ltd., Jaipur (iii) M/s Moral Alloys (P) Ltd., Delhi etc. and is issuing the invoices with intent to passing on inadmissible Cenvat credit to numerous manufacturers and dealers without delivery of the goods with the invoices.
• Show cause notice was served upon the appellants along with six other co-noticees alleging that appellants have wrongly availed the Cenvat Credit during the period from May, 2012 to September, 2014 on various invoices which were absolutely not genuine and the goods mentioned therein did not accompany with those invoices. 
• Alleging the wrong availment of Cenvat Credit by the respondent-assessee in contravention of provisions of Rule 3, 4 and 9 of Cenvat Credit Rules, 2004;

Issue –

• Whether Cenvat credit availed by the respondent is in contravention of provisions of Rule 3, 4 and 9 of Cenvat Credit Rules, 2004?

Order –

• The Tribunal finds that Commissioner (Appeals) has also appreciated that M/s. Mittal Pigments Pvt Ltd. were not afforded the opportunity to cross examine Shri Amit Gupta. The Tribunal is also of the opinion that in the findings of Original Adjudicating Authority much emphasis has been led on the statements recorded during investigation mainly on the statement of Shri Amit Gupta, but the procedure for consideration of the statements recorded during investigation to be admissible into the evidence is prescribed under section 9D of Central Excise Act was not followed.
• The Tribunal relied on the decision of the Hon’ble Supreme Court in the case of C.C. vs. Bussa Overseas Properties Ltd. wherein it has been held that the Adjudicating Authorities are bound by the general principles of evidence. Since Commissioner (Appeals) has placed extensive reliance on the statements recorded during investigation without invoking speaking section (1) of Section 9 D of Central Excise Act, the findings of confirmation of duty demand due to alleged clandestine removal are therefore liable to be set aside.
• In the present case, Shri Amit Gupta was not even allowed to be cross examined. The specific request of appellant to cross-examine Shri Amit Gupta was rather declined. It hold that said statement cannot be considered as incriminating. The authorities did not find any infirmity in the order passed by the Commissioner (Appeals). The findings therefore, are hereby confirmed. The order is accordingly upheld.
• The authorities observe that departmental investigating agencies as well as the Adjudicating Authorities have not yet started observing compliance of mandatory statutory provisions i.e. section 9D of Central Excise Act, 1944 and section 138 B of Customs Act, 1962 without which the statement recorded at the stage of inquiry / investigation will not be relevant for the purpose of proving the truth of requisite facts during prosecution.
• Appeal filed by Department dismissed.