TaxTMI 
TaxTMI 
2009 (11) TMI 485
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....en blended yarn. The products manufactured by the respondent fall under Chapter 51 & 54 of the first Schedule to the Central Excise Tariff Act, 1985. Acting upon intelligence report regarding alleged involvement of the respondents in evasion of excise duty by fraudulently availing the Modvat credit in relation to the raw materials allegedly diverted to the market investigation was carried out by the department which culminated in issuance of show cause notice dated 31-1-02 to the respondents alleging that the respondents had illegally availed modvat credit to the tune of Rs. 4,08,71,796/-. The respondents contested the proceedings and the Commissioner by the impugned order confirmed the claim of the appellants only to the tune of Rs. 44,09,228/-. 4. The respondents herein being aggrieved by the impugned order filed appeal being No. E/1451 of 2004 which came to be disposed of by order dated 1-3-2005 by this Tribunal. By the said order, the Tribunal held that the Commissioner was not justified in confirming the claim of the appellants even to the tune of Rs. 44,09,228/- and the respondents were entitled to claim Modvat credit for the entire amount for which they had claimed and de....
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.... restricted the disposal of the appeal to the extent the matter was sought to be agitated before the Tribunal in the said appeal and, therefore, it would not be appropriate for the Tribunal to reject the present appeal on technicalities. Indeed, para 18 of the order dated 1-3-05 by the Tribunal in the earlier appeal clearly states that "Consequently the impugned order to the extent to which it has been challenged in this appeal........" which apparently discloses that the Tribunal had restricted adjudication in the said appeal to the extent the dispute was sought to be raised in that appeal and the same essentially restricted to sum of Rs. 44,09,228/- and nor to the entire amount of demand under the show cause notice. Being so, the matter will have to be considered on merits. 9. It is the contention on behalf of the appellants that the Commissioner did not take into consideration the materials which would disclose clandestine diversion of the inputs and illegal availment of the Modvat credit by the respondents. In that regard, attention was drawn to para 3.12 and 3.13 of the impugned order vis-à-vis para Nos. 13.2.1, 13.2.2, 17.1, 17.2, 18, 19, 22.8, 24, 24.1, 24.2, 24.3, 25, 2....
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....d utilization thereof by the respondents is clearly reflected from the statutory records maintained by the respondents which were duly verified and confirmed by the authorities. He has also drawn our attention to the fact that the practice followed by the respondents in receiving the inputs through the dealers was made known to the department much prior to the relevant period and that is reflected in the letter dated 19-8-96 and in that regard attention was drawn to para 3.11 of the Commissioners order wherein there is reference to the said fact. According to learned Advocate, therefore, there is no case for interference in the impugned order on the ground of alleged by the appellants. It was also sought to be contended that though it is sought to be argued that the Commissioner failed to consider the matter in relation to the amount on or about Rs. 44,09,228/- in the manner it was required to be considered, there is no specific ground in that regard in the memo of appeal. 11. The perusal of the impugned order discloses that the Commissioner on going through the records had confirmed the demand to the tune of Rs. 44,09,228/- by referring to certain evidence which according to th....
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....epancy which could reveal and/or co-relate to the inputs allegedly diverted to other parties. In fact, as rightly observed by the Commissioner, there appears to be no attempt made at any point of time in the course of investigation to establish such co-relation between the inputs alleged to have been diverted and the final product which was found without the presence of the PFY element. In fact, it was purely elementary which the investigation agency ought to have known in order to establish the charge of clandestine disposal of the inputs without utilization thereof in the manufacture of the final product. This aspect should have been clearly established by the investigation machinery. In this regard, neither there was any proper investigation nor appropriate efforts on the part of the department to bring on the record the appropriate and cogent evidence. 14. Merely because the numbers and dates of LRs and GRs in the statement of the representatives of the manufacturer of the inputs and the representative of the dealers as well as of the transporters from the manufacturer of inputs to the dealers tally, that by itself, will not be a conclusive and satisfactory evidence about di....