9911796707
TMI Blog1997 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... odvat credit amounting to Rs. 2,06,990/- on a quantity of 206.990 MT of M/s. Steel Scrap on the basis of documents, which were allegedly bogus/fake or fictitious. The Department had also alleged that the endorsed gate passes shown as duty paying document had been issued by non-existent units or issued in favour of non-existing firms. The appellants were therefore charged with failure to take reasonable steps as contemplated under Rule 173Q(1)(bb) of the Central Excise Rules and the explanation appended thereto in as much as they had failed to satisfy themselves about the identity and bona fides of the manufacturers and suppliers. Ld. Advocate submitted that the entire amount of duty involved had already been debited through their RG-23 Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashed. 4. Appearing for the Department Shri Kilaniya, JDR, drew attention to the findings of the Collector in Paras 23 to 26 of the impugned order in which the Collector had observed that there is a legal obligation on the beneficiary of Modvat credit to take reasonable steps to ensure that he has taken the credit on inputs on which duty of excise has been paid. He reiterated the findings of the Collector (Appeals) in the impugned order and prayed for the rejection of the appeal. 5. Heard both sides. The question for decision falls in a narrow campass. Rule 173Q(1)(bb) read with the explanation to the Rule prescribes that the assessee should satisfy himself about the identity and address of the manufacturer or supplier, as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and had made payments to the manufacturers/suppliers through A/c Payee Cheques or the A/c Payee Demand Drafts in the name of the manufacturers/suppliers. The advocate had submitted that there was no reason for them to suspect the genuineness of the manufacturers/suppliers. I find some force in his submissions. The scheme of Modvat credit being a beneficial one and the fact that under the Explanation to the Rule 173Q(1)(bb) the obligation cast is on the person availing the credit and not on the Department, some leeway is envisaged in the matter by allowing a certain discretion to the assessee. In view of this, unless specific proof is produced to show that the reasonable steps expected of the assessee is found wanting by way of collusion o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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