TaxTMI 
TaxTMI 
2004 (9) TMI 530
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing copper ingots, copper alloys, copper sulphate and Nickel Sulphate and M/s. Ekta Enterprises, a registered dealer had indulged in fraudulent misuse of Modvat credit. 2. During investigations, all the above firms were visited and searched including their officers Shri Ashish V. Trivedi, Director of M/s. SGMCPL, Shri Jitendra D. Bhatt, CMD of M/s. JACL and Smt. Ekta V. Trivedi (C/o Shri Ashish V. Trivedi) Proprietor of M/s. Ekta Enterprises. The concerned persons were interrogated and their statements were recorded. Besides, there were several other firms and persons who were searched/interrogated during the investigations, amongst them were the following : (i) M/s. Bleach Chem Ahmedabad (ii)&nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eiving the goods and also issued invoices for clearance of excisable goods without actually manufacturing and clearing any goods and thus passed on the Modvat credit worth Rs. 1,27,10,724/- to their buyers. In other words, they were all paper transactions. All other firms and persons, as mentioned hereinabove, were also found to be involved in similar paper transactions i.e. taking Modvat credit in their records on the basis of invoices without receiving any goods and then issuing their own modvatable invoices to pass on the said credit to their buyers. All these persons confessed having indulged in these types of activities and admitted having carried out such transactions only on paper. Interestingly, however each one of them stated that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... credit amounting to Rs. 82,76,488.52 during the year 1994-95 and Rs. 50,89,999/- during the year 1995-96 totally amounting to Rs. 1,33,66,487.52 on the basis of such invoices without actually receiving any goods and without undertaking any manufacturing activity, issued their own invoices for finished goods as if they were clearing the finished goods on payment of Excise duty. They utilized Rs. 1,27,10,724/- of the Modvat credit and passed it on to their buyers namely (i) M/s. Ekta Enterprises, (ii) M/s. Ekta Metals and Chemicals Pvt. Ltd. (iii) M/s. Sarika Paints. All these three firms, being registered dealers took credit of the said amount in their records and issued their own invoices in favour of M/s. JACL of varying amounts. On the b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nstance of Shri Jitendra D. Bhatt of M/s. JACL for getting benefits from Banks and other financial Institutions. Shri Rameshbhjai M. Patel Director of M/s. Sarika Paints, too admitted that they had made the paper transactions of purchase from M/s. SGMCPL and sale to M/s. JACL for showing increased turnover of M/s. Sarika Paints for getting benefits from Banks and other financial Institutions. Curiously, however, the impugned order is silent about any proceeding having been initiated against M/s. JACL and M/s. Sarika Paints and their Directors. Vide the impugned order, the ld. Commissioner has - (i) disallowed Modvat credit of Rs. 1,33,66,487.52 to M/s. SGMCPL and demanded duty amounting to Rs. 1,27,10,724/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inable. We find that the demand of duty amounting to Rs. 1,27,10,724/- admittedly relates to duty on non-existent goods, which were never manufactured and never cleared. Interestingly, Modvat credit on the inputs is inter alia being denied on the ground that M/s. SGMCPL did not have manufacturing facility and did not manufacture and clear any goods and in the same breath, the Central Excise duty is being demanded from them on the goods manufactured and cleared by them. Admittedly when there was no manufacturing facility available with M/s. SGMCPL and no manufacturing activity was carried out by them there was no question of manufacturing and clearing any excisable goods by them. They were therefore neither eligible to take any credit on the....