2004 (97) ECC 705 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- NB-(C)

Shri V.K. Agrawal, Member (T) and Shri P.S. Bajaj, Member (J)

CCE, Indore

Versus

National Steel Inds. Ltd. & Ors

Appeal No. 1826-1828/2003-NB(C)

[Arising out of Order-in-Appeal No. IND-I/128-130/2003 dated 23.4.2003 passed by the Commissioner (Appeals-II), Customs & Central Excise, Indore]

Final Order No. A/591-93/2004-NB-C, dt. 17.8.2004, Certified on 2.9.2004

Appeal

Natural Justice -- Evidence -- Cross-Examination -- Handwriting expert -- Who declared one invoice fake -- Merely on the strength of one invoice the Respondent cannot be held liable for all the fake invoices. The Revenue has not examined the handwriting of all fake invoices with the handwriting of the officer of the Respondents. Cross-examination is not mandatory in each and every matter but in the present matter the only link between the Respondents and the fake invoice is the report of the handwriting expert. In view of this it was very essential that the Respondents should have been given a chance to cross examine the handwriting expert. Therefore, Revenue appeals rejected -- Section 35B of CEA r/w Section 45 of Indian Evidence Act.

PRESENT :

Shri V. Valte, SDR for the appellant.

S/Shri G.L. Rawal & R. Rawal, Advs. for the respondent.

Per : V.K. Agrawal

These are 3 appeals filed by Revenue against Order-in-Appeal No. 128-130/2003 dated 23.4.2003 by which the Commissioner (Appeals) has set aside the penalties imposed on National Steel Industries Ltd. and others.

2. Shri V. Valte, learned SDR, submitted that M/s. National Steel Industries Ltd. manufacture C.R. coils/Galvanised sheets; that they are engaged in trading activity with M/s. Mahabir Prasad & Co., Ghaziabad; that they were issuing Central Excise invoices to Mahabir Prasad & Co.; that a show cause notice dated 7.4.2000 was issued to the Respondents for imposing penalties as Mahabir Prasad & Co. were taking credit for passing the same to their customers on the strength of fake invoices issued by National Steel Industries Ltd.; that the Additional Commissioner under Order-in-Original No. 36/2002 dated 31.10.2002 imposed penalty on all the three Respondents; that the Additional Commissioner, however, did not impose any penalty on M/s. Mahabir Prasad & Co.; that on appeals filed by the Respondents, the Commissioner (Appeals) has set aside the Order-in-Original on the ground that there is no evidence on record to link the Respondents with fraudulent activity indulged into by M/s. Mahabir Prasad & Co. whose end fake invoices were generated at.

3. Learned SDR submitted that there was 41 invoices in the name of the Respondents out of which only 4 invoices were found to be genuine and 37 invoices were fake one; that the invoice No. 46 dated 18.5.91 which is a fake invoice was submitted to handwriting expert alongwith genuine invoice No. 36 dated 15.5.95 for comparison of handwriting; that the handwriting expert in his report reported that the document which were submitted for examination are not sufficient; that thereafter Shri Hemant Manjrekar, respondent in the present matter and some other persons who were preparing invoices during May 1995 were requested to copy out the invoice No. 46 in another blank invoice in their own handwriting; that after examination, the expert in his report dated 24.5.97 reported that the writing of bogus invoice No. 46 dated 18.5.95 and writing of invoice No. 36 dated 15.5.95 is similar one and has been written by one and the same person; that in his report he has given his conclusion that he has carefully examined handwriting of invoice No. 46 and compared with invoice No. 36 which was in handwriting of Shri Hemant Manjrekar and both the invoices had been written by one and the same person. The learned SDR also mentioned that Shri Hemant Manjrekar had accepted the fact in his statement that invoice No. 36 was prepared by him; that the request for cross-examination of the handwriting expert was not acceded to as he had given his conclusion in written manner and if there was any doubt it should have been clarified by the Respondents by giving point-wise objection before the Adjudicating Authority which was not done by them; that cross-examination is not mandatory to be allowed in all the cases. He finally submitted that there is a direct link against the Respondents as invoice No. 46 was written in hand-writing of Hemant Manjrekar; that if there was no nexus between the Respondents and M/s. Mahabir Prasad & Co. it would have not been possible to get fake invoices in the handwriting of Commercial Assistant of the Respondents.

4. Countering the arguments Shri G.L. Rawal, learned Advocate, submitted that in the show cause notice dated 17.4.2000 issued to the Respondents it is clearly mentioned in Para 7 that "Central Excise Officers of the Meerut Commissionerate searched the office premises of M/s. Mahabir Prasad & Co. During the search officers recovered blank printed invoice book......." He contended that it is, therefore, apparent that this recovery of blank printed invoices from Mahabir Prasad & Co. goes to show that they were themselves indulged in preparing the fake invoices for the purpose of availing Modvat Credit fraudulently. He has also relied upon the report submitted by the Inspector Central Excise, Indore to the Suptd. after visiting Meerut Commissionerate in connection with the inquiry conducted against National Steel Industries Ltd. He submitted that it is mentioned in the said report that the invoices on the basis of which Mahabir Prasad & Co. had availed of Modvat Credit were generated by themselves at their end.

5. We have considered the submissions of both the sides. The Commissioner (Appeals) in the impugned Order has observed that merely on the strength of one invoice the Respondents cannot be held liable for all the fake invoices. He has also observed that during the investigation conducted by the Officers no fake invoice was recovered form the premises of the Appellants and the expert has given his opinion on the basis of comparison of body writing of invoice No. 46 with the specimen writing of Shri Hemant Manjreker. The Commissioner (Appeals) has also given his specific finding that the Appellants were well within their right to cross examine the handwriting expert on the report of which they have been indicted. He also relied upon the inspection report submitted by the jurisdictional officer entrusted with the inquiry since the report clearly states that the fake invoices were generated at the end of the buyer. On the basis of these findings the Commissioner (Appeals) has come to the conclusion that there is no evidence on record to link the Respondents with the fraudulent activity indulged into by Mahabir Prasad & Co. at Ghaziabad. We do not find any infirmity in any of the findings recorded by the Commissioner (Appeals) in the impugned Order. The Revenue has not examined the handwriting of all fake invoices with the handwriting of the officer of the Respondents. On the basis of one invoice and in respect of which also the cross-examination of the handwriting expert has been denied, the Respondents cannot be alleged to have issued fake invoices on the basis of which Mahabir Prasad & Co. had taken Modvat credit. The learned SDR may be right that cross-examination is not mandatory in each and every matter but in the present matter the only link between the Respondents and the fake invoice is the report of the handwriting expert. In view of this it was very essential that the Respondents should have been given a chance to cross examine the handwriting expert. We, therefore, find no reason to interfere with the impugned Order and reject all the appeals filed by Revenue.

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