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TMI Blog2008 (3) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... by misdeclaring them as inputs for the manufacture of FTL caps and GLS caps. It appeared that RIC had fabricated records showing receipt and use of Aluminium sheets/coils of various thicknesses and had fraudulently taken and utilized Modvat credit of Rs. 24,16,288/- during the period 4/94 to 4/98. Aluminium sheets/coils involving the credit of Rs. 24,16,288/- had apparently not been used by RIC in the manufacture of declared final products. 2. After due process of law, the Commissioner passed the impugned order. He found that RIC had availed Modvat credit, on Aluminium sheets/coils received from M/s. Indian Aluminium Company and M/s. Adarsh Aluminium Agencies, Pondicherry (Adarsh). The Commissioner (Adj) examined the allegation that the impugned quantity of Aluminium sheets/coils had not been received by RIC. The inputs were of varying thicknesses and therefore unsuitable for use for production of lamp caps. The Inter Division Transfer Register (IDTR) had shown that the sheets/coils received from Adarsh had been transferred to the assessee s PCB division and for factory maintenance. At the same time, the records of tube light division showed such goods as issued for production of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had also not attempted to ascertain the quantity of impugned inputs that could have been used, from the figures of production of PCBs. 5. It was observed that the investigating officers concluded from the belated submission on 28-8-98 of the IDTR maintained by Shri Yerrama Reddy that the entries in the register were made subsequently. It was stated by Shri L. Nandakumar of RIC in his statement dated 8-10-98, that he would be preparing inward goods advice (IGA) for the goods received in the PCB division and the details would be entered in the computerized stores ledger. While issuing materials for production, he would prepare and issue receipts and submit it to the stores. It was seen from the Inter Division Transfer Register that RIC had prepared IGAs for receipt of Adarsh materials. Investigating officers did not question Shri Yerrama Reddy as to why he had not given details of the IDTR when he gave statement and why details of receipt and issue of Adarsh materials in the PCB stores ledger were not shown to the officers. Shri M.R. Subramaniam of the transport company who had regularly delivered Aluminium sheets/coils to RIC stated that he was not in a position to identify if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utives S/Shri G.V.S. Pavan, B.S. Murthy and John Kuruvilla. The main grounds taken in the appeal are that though admittedly 95% of the Aluminium sheets/coils used were rendered as scrap and the IDTR showed use of 130.605 M.Ts of Adarsh goods in the PCB division, no such scrap was accounted in the RG 1 register of the PCB division. There were separate folios relating to GLS division, FTL division and PCB division in the RG 1. So the plea that the scrap generated in the PCB division was accounted along with scrap of other divisions was not tenable as the scrap generated in GLS and FTL divisions was accounted separately in the RG 1. Adarsh goods transported to PCB division was 60624.500 kgs in 1994-95. Scrap of FTL and GLS was 43,443.48 kgs while 95% Adarsh goods alone was 57593.287 kgs. Non accountal of receipt and issue of Adarsh materials, failure to declare inputs required for PCBs in the 57G declaration and non-accountal of scrap generated in the RG 1 for PCBs were ignored by the adjudicating authority. IDTR was not seized on the date of search as the same was not available. IDTR was furnished after five months of search. RIC made entries in inward goods advice (IGA) stores regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to the impugned credit. Therefore, the Revenue has a case on merits as regards the proposal to recover the impugned credit. 10.1 The appellant was found to have accounted scrap generated under each division in separate folios of RG 1. While scrap was accounted in the folio for FTL division and GLF division, scrap generated in the PCB division was clubbed with scrap of other divisions and therefore not accounted in the RG 1 folio for PCB division is an untenable argument. Moreover, in the year 94-95, scrap generated in the PCB division should have been 57593.287 kgs. (95% of 60624.500 kgs). The scrap of FTL and GLS was 43,443.48 kgs, while 95% of Adarsh goods alone was 57593.287 kgs. Therefore, The claim that scrap generated in the PCB division was accounted along with the scrap of other divisions is obviously incorrect. 10.2 Admittedly Adarsh goods had not been used in FTL caps division. However, the assessee made entries in the inward goods advice register and material requisition record to show that Aluminium sheets/coils were transferred to FTL caps division. In this back ground, the statements of the goods transporter and the stores in-charge to the effect that Adars ..... X X X X Extracts X X X X X X X X Extracts X X X X
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