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2002 (9) TMI 481 - AT - Central Excise
Issues: Alleged replacement of prime quality granules with re-generated granules, denial of Modvat credit on HDPE granules, imposition of personal penalty
Replacement of Prime Quality Granules with Re-generated Granules: The central excise officers alleged that the appellants replaced prime quality granules with re-generated ones. However, the visiting officers did not draw any samples to confirm the quality of the granules. The appellants argued that the granules found were processed master-batch of black color used in manufacturing HDPE pipes of the same color. The quantity of granules in the premises matched the quantity for which Modvat credit was taken. The tribunal found no substantial evidence supporting the claim that prime quality granules were replaced. Consequently, the benefit was given to the appellant due to lack of evidence supporting the allegations. Denial of Modvat Credit on HDPE Granules: The Commissioner denied Modvat credit on 68.939 MT of HDPE granules, alleging that the appellants replaced prime quality imported granules with lower quality ones after availing the credit. The Commissioner stated that no evidence was produced to prove the receipt of the goods in the factory. However, transport documents indicated the transportation of the granules to the factory. The tribunal noted the contradiction in the Commissioner's observations and emphasized that the burden of proof lay with the Revenue to demonstrate that the prime quality granules were not received by the appellant. As no evidence was presented to support the allegation, the tribunal found no justification for denying the Modvat credit to the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief to the appellants. Imposition of Personal Penalty: The Commissioner imposed a personal penalty of Rs. 10,000 under Rule 173Q. However, the tribunal did not provide a specific analysis or decision regarding the imposition of this penalty in the summarized judgment.
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