TaxTMI 
TaxTMI 
2010 (2) TMI 242
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....gainst these consignments to various buyers in Punjab under Rule 57-GG (3) (i) of the Central Excise Rules, 1944 (for brevity the Rules"). It appeared that at the time of issuing of the said invoices, M/s. Shobhit Impex had the knowledge that the same were not genuine and were deliberately issued to enable the manufacturer buyers to avail the Modvat credit. On 12-12-1997 M/s. Shobhit Impex imported 20.001 MT of brass scrap valued at Rs. 7, 18,328 involving additional duty of customs to the tune of Rs.1, 45,461/- vide B.E.No. 1426 through CFS Ludhiana. A part of this consignment is shown to have been sent to M/s. Aman Engineering Works and M/s. Vardhrnan India Products, Jalandhar vide Invoice Nos. 56 dated 26-12-1997 and 52 dated 22-12-1997. However, Ashok Sharma son of Des Raj Sharma of M/s Aman Engineering Works admitted in his statement dated 31-7- 1998 that they had received the invoice No. 56 dated 26-12 without any goods, which were got arranged later on. He also admitted that the modvat credit has been wrongly availed. Sandeep Jam son of Darshan Lai Jam of M/s Vardhman India Products admitted in his statement dated 31-7-1998 that they had received the invoice No. 52 dated 22-....
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....s cast electrolytic copper rods valued at Rs.15,75,970/- involving additional duty of customs to the tune of Rs.3,12,042/- vide Bill of Entry No. 108012 through ICD Tuglakabad, New Delhi. This consignment is shown to have been further dispatched to M/s AK. Industries, Ludhiana, M/s Krishna Wire Products (P) Ltd. Goniana (respondent No.1- assessee), M/s. Alfa Products, Ludhiana, M/s. Friends Wire Industries, Malerkotla (respondent No. 3-assessee) and M/s. Pee Dee Wires (P) Ltd. (respondent No. 2-assessee). M/s. Shobhit Impex issued invoice Nos. 15 and 21 dated 12-9-1996 and 8-10-1996 respectively to respondent No. 1-assessee. On 28-5-1997, M/s. Shobhit Impex also imported 25976 MT of continuous cast electrolytic copper rod valued at Rs.18.63.719 involving additional duty of customs to the tune of Rs.3,59,016 vide Bill of Entry No. 105278. This consignment is shown to have been sold to M/s. Makkar Metal Industries vide invoice Nos. 14 dated 4-6-1997, 16 dated 6-6-1997 and 19 dated 14-6-1997 to M/s. Alfa Products Ludhiana vide In voice No. 17 dated 7-6-1997 to respondent No. 1-assessee vide invoice No.15 dated 4-6-1997 to M/s. AK. Industries vide invoice No. 18 dated 7-6-1997 and to r....
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....e wake of show cause notices, the assessees filed the replies and tried to explain that they have rightly claimed the modvat credit. The explanation put forth by the assessees did not find favour and the Commissioner, Central Excise (Appeals), Chandigarh negatived their claim and directed the reversal of the amount of modvat credit, imposed penalty and interest, vide impugned order (Annexure Al). 6. Aggrieved by the impugned order Annexure Al, the assessees filed the appeal, which was accepted by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, vide impugned order dated 26-9-2003 (Annexure A2) [2003 (158) E.L.T. 491 (Tri Del.)]: 7. The revenue did not feel satisfied with the impugned order (Annexure A2) and filed the present appeal. 8. The appeal was admitted to consider the following substantial question of law proposed in para 1(7) (i) of memo of appeal:- "Whether the Hon'ble Tribunal has erred in reversing the order appealed against and thus allowing the Modvat credit taken on the inputs received by the parties on the strength of "invalid" invoiced issued by the registered dealers." 9. Assailing the impugned order (Annexure A2), the learned counsel....
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....es and other various firms, have availed the modvat credit, on the basis of forged invoices. After considering the replies filed by the assessees to the show cause notices, which were found not to be satisfactory, the Commissioner directed the reversal of the amount of Modvat credit and imposed the penalties and interest on them. Having noted the admissions of the parties mentioned in para Nos.1 to 3 of this judgment, the Commissioner has also observed in para 3.8 of his order Annexure Al as under:- (i) The assessees violated Rules 57G and 174 of the Central Excise Rules were required to maintain a godown and registered the same with the Central Excise Authorities indicating the quantum of business receipt and storage of the imported material in the same godown; (ii) The goods were never received and stored in the godown; (iii) M/s. Shobhit Impex, Abohar M/s. Satish Metal Company, M/s Ruby Impex, Jalandhar issued fake and invalid invoices for facilitating the assesses for the availment of modvat credit, which was not due to them: (iv) M/s. Shobhit Impex as a registered dealer had issued invoices to the manufacturer of final products from their registered office/pr....
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....rongly availed. I find that the Modvat credit amounting to Rs.3,1517562 availed utilized wrongly by them is recoverable from them under Rule 571(1) of Central Excise Rules, 1944 and has already debited vide RG-23A Part-II entry No. 7 dated 29-7-98. They are also liable to penal action under Rule 571 (4) of Central Excise Rules 1944 for the contravention of aforesaid provisions of Central Excise Law. (II) M/s. Pee Dee Wire Pvt. Ltd., Sangrur have availed modvat credit to the tune of Rs. 4,73,276.81 on 10 (ten) invoices issued by M/s Shobhit Impex, Abohar. However, as discussed in the previous paras Sh. Dinesh Garg, s/o of late Day a Parkash Garg, Director M/s. Pee Dee Wire Pvt. Ltd. Sangrur has admitted in his statement date 14-9-98 that the certificate issued by Municipal Council, Sangrur is correct. Superintendent, Municipal Council, Sangrur has certified that all the consignments purportedly received by M/s. Pee Dee Wire Pvt. Ltd. Sangrur, the Council has issued only two octroi receipts Nos. 182/695 dated 16-6-97 for 2375 Kg. of Copper and 171/617 dated 27-6-97 for 2510 Kg. of copper which pertain to invoice No.20 dated 15-6-97 and invoice No.26 dated 27-6-97. Further, good....
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....o. HR-38-A-4514 in July last year to M/s. Emkay Industries Ltd. Jalandbar. Also goods of invoice No. 38 dated 4-10-97, 43, dated 7-11-97 & 34 dated 27-3-97 could not have been received by M/s. Pee Dee Wire Pvt. Ltd. Sangrur in view of the certificate issued by Municipal Council, Sangrur. I find that the Modvat credit amounting to Rs.4,73,276.81 availed/utilized wrongly by them is recoverable from the under Rule 571 (1) of Central Excise Rules, 1944. An amount of Rs.70,000/- has already been debited vide RG-23A Fad-H entry No. 254 dated 14-9- 98. They are also liable to penal action under Rule 571 (4) of Central Excise Rules, 1944 for the contravention of aforesaid provisions of Central Excise Law. (III) M/s. Friends Wire Industries, Malerkotia have availed modvat credit to the tune of Rs.39546.85 on 1 (one) invoice issued by M/s. Shobhit Impex, Abohar. However, as discussed in the previous paras, the goods of invoice No. 16 dated 18-9-96 issued by M/s. Shobhit Impex, Abohar have not been received by M/s. Friends Wire Industries, Malerkotia as Sh. Satpal s Sh. Des Raj Partner M/s. Friends Wire Industries, Malerkotla has admitted in his statement dt. 28-7-95 that he cannot subs....