2003 (2) TMI 392

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....ellants are engaged in the manufacture of goods falling under Chapter Heading 8509 of the CETA. They availed Modvat credit of Rs. 2,05,821/- on the inputs. But on scrutiny of their RT 12 returns for the month of September 1992, it revealed that they had not submitted original gate passes on the basis of which credit was availed by them. Accordingly, show cause notice dated 15-2-93 was issued to them for disallowing the Modvat credit and for imposing penalty also on them. They are alleged to had neither filed any reply to the show cause notice nor even put up personal appearance. The Assistant Collector accordingly disallowed Modvat credit and also imposed penalty of Rs. 10,000/- on them under Rule 173Q. That order of the AC dated 30-9-99 wa....

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....that the goods covered by those gate passes, were neither actually received and utilised by the appellants in or in relation to the manufacture of the final product nor those goods were duty paid. No enquiry in this regard was conducted by the adjudicating authority. Rather after issuing show cause notice on 15-2-93, the adjudicating authority kept the matter pending before him for more than six years. The appellants had even denied the receipt of the show cause notice and averred that for that reason they did not file any reply. In the Order-in-Original, the adjudicating authority has no where specifically observed that the show cause notice was received on a particular date by the appellants or by their representative. The Commissioner (A....

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....ed the same by remarking that the original gate passes were supposed to be submitted immediately after September 1992. But he has lost sight of other circumstances that the very receipt of the show cause notice dated 15-2-93 for producing the original documents was denied by the appellants. The first reminder for personal appearance was issued to them only on 26-5-99, after a lapse of over six years. Therefore, in these circumstances, the appellants' plea about destruction of the documents in the fire which broke out in their factory in 1994 could not be ignored by the Commissioner (Appeals). They could not be penalised by disallowing Modvat credit for their initial lapse of not attaching the original gate passes, but only photocopies with ....

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..... But in the light of facts and circumstances discussed above, the law laid down in all these cases is not of any avail to the Revenue. 6. The present case is not a case where any exemption had been sought by the appellants. It is also not a case where allowing Modvat credit of the disputed amount to the appellants would facilitate commission of fraud and introduce administrative inconvenience, in view of the facts and circumstances narrated above. In the instant case the appellants after availing Modvat credit did file RT 12 returns giving details of the gate passes on the strength of which it was taken. There is nothing on the record to suggest that they did not file even photocopies of the gate passes along with the RT 12 returns....