TaxTMI 
TaxTMI 
2010 (6) TMI 357
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....s will have to be decided de novo by the Tribunal, which are as follows : (i) Whether the appellants were entitled to Modvat Credit; (ii) Whether the Authorities were justified in demanding duty and imposing penalties in the light of the statement of the appellants that the penalty against the supplier of raw material and the importer had to be set aside and that there was no challenge to that order by the Revenue; and (iii) Whether the demand of duty and imposition of penalty was justified when the demand of duty and imposition of penalty stood set aside in the case of some other parties. Accordingly, the impugned order is set aside and the matter is remitted to the Tribunal for de novo consideration in the light of afore-stated three issues formulated by this court. The civil appeals stand disposed of with no order as to costs." 2.The learned Advocates for the appellants made detailed submissions on each of the above issues. 2.1 On the first issue, the learned Advocate submits that the importer M/s. Shobhit Impex instead of storing the goods in the premises of the registered dealer, di....
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....ies Ltd. and the case of M/s. Tiruputi Chemicals Ltd. He also added that the basis of demand in respect of all the 12 parties covered by the impugned order is that M/s. Shobhit Impex, the importer issued only invoices without supply of any goods and therefore, the facts are identical. Minor variations in details do not make the cases as different. 3. Learned SDR submits that the appellants have not received the goods on which credit was taken. This is evident from the statements of representative of M/s. Shobhit Impex, representatives of two intermediaries who supplied the goods, and the statement of transporter and the first statement of MD of the appellant company. He submits that though the Managing Director of the Company, in the second statement given by him, he claims that that certain goods were received without accompanying invoices and subsequently on receipt of the invoices, the goods were taken to the factory premises and credit was taken, no co-relation of the goods said to have been received has been done and therefore, the second statement is not to be relied upon. 4. I have carefully considered the submissions from both sides and perused the records....
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....tory of the manufacturer of final product, as the case may be wrongly or without taking reasonable steps to ensure that appropriate duty on the said inputs or capital goods has been paid as indicated in the invoice or any other document approved under these rules evidencing the payment of excise duty or the countervailing duty, as the case may be, accompanying thereof, or takes credit of duty or money which he knows or which he has reason to believe, is not permissible under these rules, or does not utilise the inputs or capital goods in the manner provided for in these rules, or utilises credit of duty or money in respect of inputs or capital goods in contravention of any of the provisions of these rules, or does not render proper and true account of the receipt and disposal of the said inputs or capital goods and the credit of duty or money taken thereon as required under these rules, or contravenes any of the provisions contained in Section AA or AAA or AAAA of Chapter V of these Rules", he shall be liable to a penalty not exceeding 3 times the value of the excisable goods or Rs. 5,000/- whichever is greater. None of the ingredients of this sub-rule are attracted against appella....
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....ong rule has been quoted. The Tribunal did not hold that the goods were indeed supplied by M/s. Shobit Impex. The factual foundation relating to irregular passing of credit has thus not been disturbed. When the registered dealers have not supplied the goods to the appellants which stand admitted by the Director of the appellant company himself, the non-imposition of penalty on the supplier of invoices on a technical ground cannot give any relief to the appellants. The appellants are the beneficiary of irregular credit taken as they only have utilised it towards discharge of their duty liability. The intention to evade payment of duty on the final products manufactured by them is thus clearly evident. Therefore, setting aside the penalty imposed on "the supplier of raw material" and the department not challenging the said order, in my considered opinion cannot give any relief to the appellants as the appellants have clearly indulged in malpractices with intention to evade the duty on the final products. 6.1 The other grievance of the appellants was that demand of duty and imposition of penalty stood set aside in the case of some other parties to the impugned orders and ther....