2014 (7) TMI 945

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....Excise and Service Tax  Appellate Tribunal, Bangalore (for short CESTAT) by raising the following question of law for adjudication: Whether the Modvat Credit can be taken on the inputs, which were not suffered duty? The case of the appellant Commissioner of Central Excise and Customs is that without there being any material on record to the effect that the goods, which have been imported by the respondent-M/s.Vera Laboratories Limited, had suffered duty, they cannot be permitted to avail Modvat Credit. We have perused the order of the Tribunal and also the material which is forming part of the record before the Tribunal. The respondent had also filed a paper book which formed part of the record before the Tribunal. The case invol....

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.... order, the present appeal is preferred by the Department. Sri V. Gopala Krishna Gokhaley, learned Standing Counsel for Central Excise appearing for the appellant, submits that there is no finding of the Tribunal to the effect that customs duty has been credited to the account of the Department inasmuch as the Customs House Agent M/s.Far Port International had committed fraud and utilized the amounts from other parties, and thereafter, the material of some other party came to be cleared, as such, with respect to the subject Bills of Entries, there is no credit of the customs duty. He further submits that the Tribunal had wrongly relied on its earlier decision in the case of Hetero Drugs case and CC Jaipur v. Genus Overseas Electronics Lt....

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....cerned, the material on record would disclose that specific demand drafts have been drawn in favour of the Commissioner of Customs account M/s.Vera Laboratories Limited. In such circumstances, the fraudulent acts of the Customs House Agent (CHA) in trying to account those demand drafts in favour of third party would not arise except with the specific connivance of the department officials. The order in original does not indicate that the subject demand drafts have been credited to any other partys account. It is not in dispute that the amounts were credited to the Consolidated Fund of Union of India, in which event, it is not permissible for the Department to argue that no such amounts have been  credited to the account of the Departme....