TaxTMI 
TaxTMI 
2009 (3) TMI 749
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....ary, 1999, the assessee availed and utilized the Modvat credit to the tune of Rs. 2,74,164/- on brass/copper scrap purchased from the open market without the cover of any central excise duty paying documents, but allegedly obtained the fraudulent central excise modvatable invoices from the registered dealers and substituted the same against the above purchase for using the same in the manufacture of Brass sheets and circles, in contravention of Rule 57G of Central Excise Rules, 1944. In the impugned order, the Show Cause cum Demand Notice was decided and (a) Modvat credit of Rs. 2,74,164/- was disallowed under the provisions of Rule 57-I(1) of the Central Excise Rules, 1944 read with the proviso to subsection (1) of the Section 11A of the Central Excise Act, 1944. This amount was also ordered to be appropriated against the amount of Rs. 6,00,000/- already paid by the assessee; (b) penalty of Rs. 2,74,164/- was imposed under the provisions of Rule 57-I(4) of the Central Excise Rules, 1944. This amount was also ordered to be appropriated against the amount of Rs. 6 lakhs already paid by the assessee; (c) ....
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....ver, these subsequent submissions were considered as an afterthought. The Department has not negated/commented upon the explanation given by Mr. Nagar and Mr. P.N. Kansara. The Commissioner (A) reckoned that such a rebuttal was necessary for upholding the Department' case. (ii) The facts of the statement are contradictory to his own admissions in the same statement as rightly pointed out by the appellants. However, the Department has not made any further investigations to find out truth of the said statement including his subsequent submission vide letter dated 1-12-99. The Department mainly placed reliance on the fact that the R.T.O confirmed the vehicle nos. were of two-wheelers as against the claim of the appellants as per document claiming them to be as four-wheelers. However, Mr. Nagar gave precise vehicle registration nos. and confirmed that vehicles nos. given earlier were wrong. However, the subsequent information brought on record has not been verified so as to evaluate its genuineness as the information had a direct bearing on the inputs. As such the alleged non-receipt of inputs has not been established by the Department with any additional evidence/....
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....has erred in holding that the Modvat credit was held to be proper and correct to the extent of the loading capacity of the vehicle. The Department never accepted that the goods to the extent of the permissible capacity were received and the Modvat credit was not available only for the excess quantity. The Department, in all such cases, has contended that the assessee, in connivance with the dealers, had procured the modvatable invoices without the goods, as described in the said invoices and procured goods, on which no duty was payable or paid, from the open market and the entire amount of the Modvat credit taken against such invoices is inadmissible as the material was never received. Seizure of such goods in the factory is an unchallenged evidence to the above contention of the Department. 10. It has been held by the Commissioner (A) that the statements of Shri Nagar and Shri P.N. Kansara were retracted by them and immediately correct positions of the vehicle numbers and other details of the inputs were given. In fact, these were furnished vide letter dt 11-10-99 to the Adjudicating Authority, without any supporting evidence. Had it been true, then they would have produce....
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....s already pointed out, the Show Cause Notice was issued on 2-7-99 and Shri Nagar waited upto 1-12-99 to give the correct vehicle numbers to the Adjudicating Authority, without any supporting documents of evidence. The Commissioner (A) has not appreciated the evidences brought on record by the Department to substantiate the case. I, however, find that the evidences brought on record are not only oral but are corroborated by the documents. 13. It is fact on record that production of the final product has not been denied by the Department. However, it is to be noted that the assessee procured the raw material (input), on which no central excise duty was paid/payable, and procured central excise duty paying documents from the Registered dealers for that quantity, without bringing the actual duty paid goods, as described on such invoices, and availed the Modvat credit, though no duty was paid on the actual i.e. equal quantity of substituted raw material brought in the factory. The investigations by the Department are not presumptive in nature. These are borne out by the corroborative evidence and the statements. 14. It will not be out of place to mention here that Shri K....