2006 (5) TMI 392

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., Chennai Bench. The issue involved is availment of irregular and excess Modvat credit. The appellants are manufactures of Transformers, which are supplied to Andhra Pradesh State Electricity Board (APSEB). The Preventive Officers of the Central Excise Department intercepted a Truck on 25-07-1999 carrying 100 KVA Transformer on which no duty was paid. This incident lead to further investigations. The appellant has another unit, which services Transformers. The case of the Revenue is that the appellant availed Modvat credit and diverted a part of the input to the Services unit. According to the Revenue the Services unit has utilised more inputs than what has been shown in their records. Hence, the Revenue has come to the conclusion that ther....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....also demanded as duty from them; (iv)   Penalty of Rs. 51,26,869/- which is equivalent to the amount of Modvat credit irregularly availed; (v)     Interest as applicable on the Modvat credit misused i.e. Rs. 55,44,417/- in terms of Rule 571(5); (vi)   Penalty of Rs. 7,440/- in terms of Section 11AC; (vii)  Interest on Rs. 7,440/- under Section 11AB; (viii) Penalty of Rs. 7,00,000/- under Rule 173Q (ix)   Personal penalty of Rs. 10,000/- on Shri M.R. Srinivasa Moorthy, Materials Manager and Central Excise incharge under Rule 209A of CE Rules. 2. Shri V.S.V. Subrahmanyam, the learned Chartered Accountant, appeared for the appellants and Shri K. Sambi Reedy, the l....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., party has requested for cross-examination of the "Investigation Officer" with reference to the calculation made by the Revenue which has not been acceded to. Accordingly, the order suffers from the denial of principles of natural justice." In the remand order, it can be seen that the CEGAT had given a specific direction to take into consideration the certificate given by the Chartered Engineer. The Chartered Engineer's affidavit is reproduced below: Affidavit I, J. Venkata Swamy, S/o. Sri J. Nagappa, R/o. Hyderabad, do hereby solemnly affirm and state as under: - 1        THAT, I am an FIE i.e. A Fellow of Indian Institute of Engineers; 2        THAT, My ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed to comparing the input ratios furnished by BTPL with SION because no physical study is now possible for the consumption of inputs for the period 1995 to 1999 and further due to the fact that SION is a well conceived system of providing for the input consumption norms in case of any validations on technical grounds; 7        THAT, I certify that input consumption norms cover all losses that arise in the entire set of operations i.e. right from procurement to storage to manufacturing operations to despatch of goods to the customers; 8        THAT entries C324 & C325 of SION of the EXIM Policy are the applicable entries for the products mentioned at point number (3)....