TaxTMI 
TaxTMI 
2008 (3) TMI 332
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....nd Appeal No. 18/2005 seeks to challenge the order, passed in Excise Appeal No. 2666. These three appeals are by three different appellants, but are closely interrelated, and are, therefore, being decided by this common order. 2. Necessary facts are, that the officers of the Directorate General of Central Excise Intelligence searched the premises of the three appellants on 3-5-2001, under the belief, that they were evading Central Excise Duty, by clandestinely removing the excisable goods, without payment of duty, and were misusing the Modvat credit scheme, by diverting inputs, namely mechanical watch movements, on which credit was being availed. The relevant records were resumed under the respective Panchnamas, prepared at the premises,....
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.... manufacture of quartz watches. The learned Tribunal also negatived the contention, that those were not mechanical watch movements, but were quartz watch movements, and on that basis, it was found, that the Modvat credit was illegally availed, and the demand thereof was confirmed. Then, the demand raised in the sum of Rs. 36,87,053/-, and Rs. 61,410/- on the ground of shortage of 96017 pieces of watch cases, and 7548 pieces of quartz movements, was rescinded by the learned Tribunal, on account of absence of any tangible evidence to prove the clandestine clearance of the same by the company in the market to various buyers. Then, the demand of Rs. 69,79,797/- raised on account of clandestine removal of 247007 watch cases, was also set aside, ....
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....ter taking the credit by the Firm. It was found, that mere non-manufacturing of mechanical watches, during the period in dispute, by the Firm, did not lead to an irresistible conclusion, that the watch movements were disposed of as such, especially when the Firm had offered explanation, that the movements were rendered waste. Then, deciding Appeal No. 2669, the demand of Rs. 15,49,762/- was confirmed, on account of Modvat credit having been wrongly availed on mechanical and quartz watch movements, which were later on removed in a clandestine manner as such. Again it was found, that the mechanical watch movements could not be utilized in the manufacture of digital electronic watches, as for that, digital modules were required. 6. When the....
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....as either the goods have been disposed of, or they have not been disposed of. To understand the ground, of want of user of the imported movements, the goods must be available with the manufacturer, or should have been cleared after the payment of requisite excise duty, and if the goods are found to have been disposed of, the basic raw material, being the basic watch movements, whether mechanical or quartz, were also required to be traced, as to under what documents, they have been procured, and whether Modvat credit has been availed by respective appellants or not. It does not stand to reason, that the manufacturer would not use the movements obtained after availing Modvat credit, and would manufacture watches by using some other movements,....