Statutory Records Prove Receipt and Consumption of Goods: CESTAT quashes Central Excise Duty Demand [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the central excise duty demand and noted that statutory records prove the receipt and the consumption of goods.

It was noticed by the investigation that respondent, Shah Alloys Limited, is engaged in evasion of Central Excise Duty by way of availment of Cenvat Credit on the basis of the invoices issued by the dealers located in Mumbai and Pune without actual receipts of cenvatable goods i and further to substitute such non-receipt of cenvatable goods i.e located in Mumbai and Pune without actual receipts of cenvatable goods, they were either directly purchasing/ receiving non-duty paid S.S. local scraps (without covering of any legitimate documents) from various scrap suppliers.

The Additional Commissioner, Prabhat K. Rameshwaram, who appeared on behalf of the Revenue reiterates the grounds of appeals and that the adjudicating authority erred in considering the affidavits of the dealers/ transporters /scrap brokers retracting their confessional statements recorded by the investigating agency. Some of the statements were retracted at the adjudication stage, during the course of cross – examination, which appears to be after –thought only as it has not been made before the investigating officer.

PM Dave in respect of appeal of M/s Shah Alloys Limited submitted that the main ground in the revenue’s appeal is that the adjudicating authority erred in considering the affidavits of the dealers/ transporters/scrap brokers retracting their confessional statements recorded by the investigating agency, and the adjudicating authority also erred in considering the retractions during the cross-examination of such persons. The ground raised is that such affidavits and also the deposition before the Commissioner during their examination were an after –thought.

The Counsel further submitted that in case statements recorded by the revenue officers were contrary to the information and details entered in the statutory records and other documents, then the documentary evidence carried higher evidentiary value compared to oral statements.

A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “In the present matter the goods were found to be duly shown as received and entered in the factory of the respondent. The statutory records of the respondent concern show the receipt and consumption of the goods. We therefore find Learned adjudicating authority has rightly allowed credit to the respondent.”

Dismissing the appeal by Revenue, the Bench further noted that documentary evidence should prevail over the oral statement made by persons and particularly when the same were admittedly retracted. We also find that when the investigating authority visited the factory premises of the respondent, they did not take any stock of the raw materials. In the absence of any evidence of non-accountal of raw material or shortage of quantity of raw material, the allegation of non-receipt of inputs is without any basis hence not sustainable.

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