The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed re-hearing for issuing show cause notice based on partial un-official records for recovery of fraudulently availed CENVAT Credit of Customs duty.
Tibrewala Industries (P) Limited, the appellant assessee engaged in the manufacture of the sheathing compound and they obtain their main raw material i.e. plastic granules from Gas Authority of India Limited (GAIL).
The assessee appealed against the order passed by the Commissioner for confirming the recovery of fraudulently availed CENVAT credit and for the imposition of a penalty.
Naveen Bindal, the counsel for the assessee contended that the entire case of the department was based on statements of different persons and non-correlated documents.
Further submitted that dropping of the previous show cause notice had no bearing on the present proceedings as the present case is based on different grounds; this observation was not acceptable as both relate to the seizure of goods at the assessee’s premises.
Also stated that the total demand was worked out based on cash alleged to have been deposited by the assessee in counsel requests to consider the above submissions in the Bank and no short payment can be alleged on such goods and hence the penal proceedings merit to be set aside.
Aneesh Dewan, the counsel for the department contended that the assessee had fraudulently availed CENVAT credit to the tune of lakhs of rupees and the assessee had not maintained the register properly and as such, there was un-accounted material in the factory.
Further stated that the allegations in the show cause notice are mainly based upon statements of the persons, stray and partial un-official records and the issuance of show cause notice and imposition of penalty was as per the law and liable to be sustained.
The Bench observed that it was necessary to remand back the matter to the adjudicating authority for fresh adjudication after giving sufficient opportunity for the cross-examination of a key witness to the assessee.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) directed the adjudicating authority to re-hearing the matter after providing sufficient opportunity for cross-examination of the witness by the assessee.
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