TaxTMI 
TaxTMI 
2006 (2) TMI 27
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....anufacture Polyester Textured and Twisted Yarn which are excisable commodities. Shri Kamalnayan Dhananiwala is the Managing Director of DTPL. On the basis of investigations, it appeared that M/s. DTPL were receiving Partially Oriented Yarn (POY) from M/s. Sanghi Polyesters Ltd. in the name of five fictitious units. It was alleged that they manufactured textured yarn out of POY received from M/s. Sanghi Polyesters Ltd. (SPL) and cleared them clandestinely without payment of duty. The Show Cause Notice was issued on 14-3-1997 proposing to recover an amount of Rs.1,19,30,254/- being the duty on the goods removed. Penalty was also proposed. The Adjudicating Authority passed an order 28-11-1997 confirming the demand of duty. Further penalties we....
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....POY. (vi) No statements have been recorded from the persons who are said to have transported the 59 consignments of POY from SPL to DTPL, who had paid for the transportation charges is also not available on record. (vii) No seizure of excess quantity of Texturised Yarn (final product produced out of POY) from the factory. (viii)No seizure of Texturised Yarn in transit (while being removed allegedly without payment of duty). (ix) No seizure at job workers premises who are said to have received non duty paid texturised yarn for conversion into grey fabrics. (x) No record regarding receipt of grey fabrics converted out of non- duty paid texturised yarn and disposal thereof. (xi) The impugned order confirms the demand only based on the st....
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....ithout payment of duty if one were to consider that the value addition is less than 10% and the input credit available will be almost equal to the duty payable on the finished product manufactured out of the inputs. (xvi) The a seek credit if it is to be held that there had been receipt of 59 consignments of POY as noted in, Annexure-I to Show Cause Notice for clandestine manufacture and removal of texturised yarn without payment of duty. (xvii) The gist of the argument before the Hon'ble Tribunal was that there is no evidence to show that raw materials (POY) re- moved/cleared by SPL under 5 different names indicating such persons as consignee were received by the appellants. The Show Cause Notice would only refer to few instances where c....
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....hananiwala has also accepted that POY was received under five different fictitious names. Statements have been taken from Shri Govinda Ravi and Shri V. K. Narayana of Sirsila who undertook manufacturer grey fabrics on job work basis for DTPL. After receiving texturised polyster yarn cleared by the appellant without payment of duty. It is also revealed that M/s. Hyderabad VLT Co., Hyderabad transported texturised yarn manufactured by DTPL to the job workers in Sirsila confirming the receipt of POY by DTPL. Even though the same was invoiced to other firms. In view of these overwhelming evidences, the Adjudicating Authority has come to the conclusion that the appellants received POY for clandestine manufacture and clearance. All the contention....
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....lable and also in view of the fact that Revenue has established that the goods have been received by DTPL, it is proper that modvat benefit should be given in respect of the duty paid on all the 59 invoices. Therefore, while upholding the duty demand, we order that modvat benefit should be given in respect of all the 59 invoices on the basis of the triplicate copies available. The point raised by the Adjudicating Authority that the possibility of the duty paying documents having been misused elsewhere cannot be a ground for denying modvat credit to the appellants especially when the department has made a strong case that the goods have been received by the appellants for manufacture and clearance without payment of duty. It is seen that the....