TaxTMI 
TaxTMI 
2005 (3) TMI 543
X X X X Extracts X X X X
X X X X Extracts X X X X
....uments issued by dealers were other than those received by the Appellants. (ii) That the Appellants require the Sheets/Plates of thickness 3.15 mm, 3.50 mm, 4 mm, 5 mm, 6 mm, 8 mm and 10 mm, which were received from the dealers, but duty paying documents were for the Plates/Sheets of thickness other than the required thickness mentioned above : (iii) That the Appellants did not provide any evidence of payment of octroi, transportation, etc. (iv) That the sub-Heading Nos. mentioned in the dealers' invoices indicate the thickness other than the one actually received. and the appellants were directed to why credit of Rs. 26,61,571/- availed in respect of inputs in Annexure A to then notice should not be disallowed & recovered under Rule 57-I(i)(ii) of the Central Excise Rules read with Rule 12 of the Cenvat Rules, 2001 & penalties be imposed. 1.4 Commissioner found - The allegation in the show cause notice is that the assessee availed of modvat credit on hot rolled/cold rolled coils/sheets/plates which were not received in their factory. The assessee submitted that they were properly recording the information available with them an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....godown basis. It is also noticed that the dealers have either declared that freight and octroi was paid by the assessee or failed to submit the same. In other words, the registered dealers and the assessee failed to produce any documents showing payments of freight and octroi, thereby failing to establish any co-relation in terms of the material received by the assessee and that supplied by the dealers. Hence invoking of extended period of five years is quite convincing to me. Regarding assessee's submission that they correctly followed the modvat procedure, I observe that they were found to be fraudulently availing of modvat credit on the basis of invalid invoices issued by the registered dealers. It is astonishing as to how they could not explain the cause of discrepancies when the assessee was confronted with the discrepancies in thickness of hot rolled/mild steel sheets/plates supplied by the registered dealers and those actually received by them. Nor could the assessee produce the corresponding delivery challan or octroi payment documents and transport documents to substantiate their stand before investigating officer. The assessee submitted that they did not contravene any....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l years in Central Excise matters, the assessee should have the wisdom of assuring that the raw materials received by them were of correct specification they contracted for. They should have immediately rejected the entire material if they were not of required specifications. Perpetuating the errors committed by their suppliers of raw materials eyeing towards the huge Modvat credit that could fetch them, which otherwise would lead to leakage of revenue, is nothing but an offence and calls for stringent punishment apart from recovery of wrong credit. During the course of investigation, I observe, the investigating officers gave ample opportunities to the assessee to produce details of freight, octroi. If the assessee's intention was bona fide enough, they could have submitted the payment had received materials of thickness beyond 10 mm or not. In other words, I would have simply convinced the rate of hot rolled/cold rolled sheets and coils thickness-wise so that I could apprehend or conclude if the assessee received materials below 10 mm thickness or not. Instead of submitting the said information, the assessee engaged in diverting tactics and tried to blame the registered dealers b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies on them to produce that evidence as per the relied upon material. (b) The statement of same Shri K. Mehta, further goes to state - ".............I have been shown in statement of Shri Pravin. M. Jethwani Director of M/s. Basant Rubber Factory Limited where he has clearly mentioned that the M.S. Plate of only following thickness is required by them and no other thickness is required by them or used by them. Thickness of M.S. Plate required by M/s. Basant Rubber Factory Ltd. 3.15 mm, 3.5 mm, 4 mm, 5 mm, 6 mm, 8 mm, 10 mm. I confirm that any company M/s. Shipyard Co. has supplied M.S. Plate of only the above thickness namely as given such as 3.15 mm, 3.5 mm, 4 mm, 5 mm, 6 mm, 8 mm & 10 mm" .........                 (emphasis supplied) This admission, not only would induce us to set aside the charge of non receipt of the inputs by the assessee but also confirm that plates/sheets of various thickness as req....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iated the enquiry. (e) The allegation of a particular chapter heading been mentioned in the document to indicate the actual thickness & that was not the import received could be a result of the dealers not being very accurate in the noting of particulars on the invoices issued by them. The no value/price differential evidence brought on record to show a deliberate beneficial attempt in such mistakes allegations cannot defeat the credit & lead one to conclude that inputs did not come. (f) It is brought on record that Purchase Orders were placed for a specific thickness by this ISO9001 company in writing, after March 1999 in all cases. On receipt good receipt notes were prepared which show the thickness of the material received & after inspection entries are made in Credit Registers. The adjudicator's findings, of no complaints about order placed & defects pointed out, therefore cannot be upheld. (g) No statutory requirement of submission or furnishing of Information on Purchase Advice shown. Non compliance finding on this account therefore cannot be a ground for suppression as held in a series of ....