9911796707
TMI Blog2000 (6) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... had managed to procure excise duty-paying documents such as GP1s of ship breaking scrap. The credit availed of by the appellants was therefore held as recoverable and penalty of Rs. 6 lakhs imposed. 2. We have heard Shri L.P. Asthana, ld. Advocate for the appellants and Shri Mewa Singh, ld. SDR for the Respondent Commissioner. 3. The appellants are a Company incorporated under the Companies Act, 1956 manufacturing at their factory at Indore, cast billets for melting iron and steel scrap with the aid of electric furnace. They were also availing of Modvat credit on the inputs procured for the manufacture of their final products. According to the appellants they were receiving ship breaking scrap as input by specific orders for such scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit that had been availed of on the Gate Passes was without actually receiving the goods shown in the said Gate Passes. Further allegation against the appellants was that they had only procured Gate Passes of ship-breaking scrap from bogus suppliers. The period mentioned in the SCN was 1-3-1988 to 31-8-91 and the date of SCN was 17-2-93. 5. Replying to the SCN, appellants contended that they had been purchasing ship-breaking scrap from persons engaged in the said business; all the payments made by them to the sellers of this scrap were by way of 'Account Payee' cheques; they had submitted periodically to the Department monthly RT 12 returns showing the details of the Modvat credit availed and utilised; that these returns were duly appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with market scrap which is a non-duty paid item. These statements had not been contradicted. Further, Shri Haroon Isa Bhalla of M/s. Malvi Ship Breaking Co. in his statement had admitted that the category of scrap L.1 and L.2 and commercially heavy category scrap cannot be obtained by ship-breaking and that the goods supplied by them to the appellants were not goods originally cleared from ship-breaking yard but they were actually market scrap. The appellants had not been able to show anything to the contrary. Further, the appellants had not given any satisfactory reply to the allegation in the SCN that their office correspondence showing the extra amount of a Rs. 350/- per M.T. had been given in cases where GP1 was provided by the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance placed on such GP1s by the assessee cannot be accepted. Besides, Indore Collectorate Trade Notice No. 50/89, dated 5-5-1989 extending Modvat credit on the basis of endorsed Gate Passes made it a condition that it will be allowed only in cases where the entire goods covered by GP1s were transferred to the parties in original packages. In Para 9.15 of the impugned order, the Commissioner had also observed that the statements relied on by the Department had not been retracted. At the time of cross examination also they had reiterated their earlier statements. The Commissioner found that though the statement originally given by Shri Jagmohan Singh, General Manager of the appellant Company had been contradicted by him at the time of cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed without cover of authorised duty paying documents, especially when it is a case of deemed credit. 7. Ld. Counsel for the appellants argued that the appellants had placed order for heavy scrap which was nothing but ship-breaking scrap. He refers to the cross examination of certain witnesses as well as the original statements given by them in which the witnesses had explained the facts in greater detail. The suppliers viz., Shri Anwar Ali S/o Bachhu Bhai and Shri Nenumal Rajai had in the cross examination before the adjudicating authority clearly stated that whenever they used to get scrap from ship-breakers the same goods were sent to the appellants by endorsing the Gate Passes. They had also stated that apart from ship-breaking scrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants were vague and contradictory in nature. Further, the SCN had not invoked Section 11A of the Central Excise Act and therefore demand of duty for the extended period was not maintainable. In any event, the penalty of Rs. 6 lakhs was uncalled for as there was no contumacious conduct on the part of the appellants. 9. Ld. SDR reiterated the findings of the Commissioner and prayed for the confirmation of the impugned order. 10. We have considered the submissions of both sides and have perused the record. We find that in the impugned order the Commissioner has given detailed reasons for arriving at his conclusions. We find that the appellants have failed to give satisfactory explanation to the main allegation against them that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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