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TMI Blog2005 (11) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 57 I (1) (iii) of the Central Excise Rules. Further, he confirmed a differential duty of Rs. 1,16,344/- against them under Rule 9(2) of the Central Excise Rules read with Section 11A(2) and the proviso to Section 11A of the Central Excise Act, 1944. He imposed penalty equal to the demand of duty under Rule 57I (4) of the Central Excise Rules, 1944. Further he imposed a penalty of Rs. 1,16,344/- under Section 11AC of the Central Excise Act. Interest under Section 11AB and under Rule 57 I (5) of the Central Excise Rules, 1944 was demanded. The appellants have strongly challenged the impugned order. Hence, they have come before this Tribunal for relief. 3. Shri S.R.M. Murthy, ld. Consultant appeared for the appellants and Shri K.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise duty of Rs. 1.16 lakhs being the differential duty payable on extra charges recovered from the buyers which the appellants had paid before issuance of show cause notice. The respondent, therefore, has already admitted that some duty was paid on the D.G. Sets involved in the impugned transactions. Surprisingly these transactions were also part of the confirmation of duty on account of denial of Modvat credit. (iv) The very payment of initial duty on the D.G. sets has not been disputed by the department and this proves that the D.G. sets were assembled in the factory and that it was only the question of recovery of additional duty on account of some additional amounts which the appellants received from the consignee. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees of the appellants' company. In his statement dated 4-1-1999 Shri M.P. Yadav has referred to transactions in respect of sale of D.G. Sets which has been taken as a basis to conclude there is no manufacturing activity in the factory. Such references made by both Shri M.P. Yadav, and Shri V. R Kulkarni and Shri S.D. Salve are only about the transaction dealing with diversion of goods cleared from the factory in cases where the original consignee refused to take delivery of the goods despatched to him as per original order. There are also instances where invoice raised to parties without despatching the goods. These are instances where invoices are issued to facilitate to get financial assistance from Banks and other financial instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een paid and differential duty is demanded then there must be definitely manufacturing activity. The appellants have stated that several audit parties have visited the unit. The appellants appear to have indulged some undesirable activities like raising fake invoices etc. But demanding differential duty and denying Modvat credit on the same goods on the ground that they have not undertaken any manufacturing activity in the factory appear to be logically inconsistent situations. The original authority has reproduced the statement of several persons but his findings are not very clear. We are of the view that the order-in-original is not sustainable. The appellants had already paid differential duty demanded. In the absence of clear cut evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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