9911796707
TMI Blog2010 (1) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of Non-Alloy Steel Ingots falling under Chapter 72 of the Central Excise Tariff Act, 1985 and have been availing facility of Cenvat credit. M/s. Shiv Shankar Iron Steel Trading Company, Mandigobindgarh, who are also the holder of Central Excise Registration Certificate of Registered Dealer for dealing in excisable goods, were passing on Cenvat credit to the respondents of the excisable goods. The said dealer was importing the scrap through CFS, Ludhiana, and availing benefit of customs duty in terms of Notification No. 17/2001 dated 1st March, 2001. The availment of benefit of customs duty under the said Notification was subject to fulfilment of certain conditions which included the condition that the imported goods were required to be used for the purpose specified. In case of goods supplied to the respondents on which credit was passed were for melting, as the goods so supplied formed raw material for the production of the final product manufactured by the respondents. 3. It is the case of the appellant that, information was received by the Department that the said dealers were issuing invoices without actual supply of the goods to the respondents. On verification of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana High Court vide its order dated 18th August, 2009. He also submitted that, no much credence could have been given to the end use certificate stated to have been produced by the respondents as such a certificate is issued merely on the basis of the records submitted by the assessee and not on physical verification of actual use of the product. According to the learned DR, the end use certificate in question dated 22nd March, 2002 related to the product which was stated to have been utilized for the manufacture of the final product in the month of July, 2001 and, therefore, it is apparent that physical verification of actual use of the product was impossible. He further submitted that, the case clearly involves element of fraud played by the respondents and, therefore, penalty is warranted and justified. 5. On the other hand, the learned advocate for the respondents submitted that, the respondents were never furnished with the copy of the report stated to have been submitted by the concerned DTO/RTA in relation to the verification of the vehicle numbers and, therefore, there was violation of basic principles of natural justice and on this count itself no fault can be found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001. It is the case of the Department that two of the invoices which referred to transportation of 37.945 MT of the scrap from the dealers to the respondents of the total value of Rs. 3,22,492/- on which Cenvat credit of Rs. 33,429/- is sought to be availed by the respondents, disclose the vehicle number as PCK-4292 and PAP-7557. The verification of the same through the concerned DTO/RTA Office reveals that the vehicle no. PCK-4292 was a auto cycle, whereas there was no vehicle issued with the number PAP-7557. In response to the said material by the Department, it was the case of the respondents that the discrepancy with regard to the vehicle numbers in the invoices issued by the dealers was in all probability attributable to the fact that it was the practice with the truckers to use duplicate or false number plates. In that regard, news items published in Patiala Kesari (Hindi) dated 2-4-2006 and the Telegraph Calcutta dated 2-1-2006 were sought to be relied upon. The respondents also had made grievance about the non-receipt of copy of the report which was referred to in the show cause notice as having been received from the Officers of the Customs Commissionerate, Amritsar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the invoices in question is false? (iv) Whether in the facts and circumstances of the case, the same warrant penalty? 11. There is no doubt that copy of the report was not supplied to the respondents even though a grievance was made by them in relation to non-receipt of the copy thereof in their reply to the show cause notice. This is evident from the order passed by the adjudicating authority wherein he has summarized the reply to the show cause notice. At the same time, it is also a matter of record that the adjudicating authority had essentially relied upon the said report to arrive at the finding about non-transportation of the material by the dealers to the respondents. Being so, as a rule, the finding based on such report without copy thereof being made available to the assessee, can hardly be said to be a finding arrived at in compliance of the principles of natural justice. The matter, however, does not end here. It is necessary to ascertain, whether from the records the appellant is able to establish its allegations in that regard de hors such report. 12. From the bare perusal of records and in particular, the summary of the reply by the respondents to the show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned invoices. This clearly leads to a conclusion that the investigation carried out by the Department about non-disclosure of correct numbers of vehicles which could have transported the material described in the invoices was not only undisputed, but it clearly did not require the Department to rely upon the report submitted in the course of the investigation and the onus had clearly shifted upon the respondents to establish that the materials described in the invoices were actually and factually transported from the dealers to the respondents and the same were actually received by the respondents. 13. Undisputedly, the said burden was sought to be discharged by the respondents on the basis of the document in the form of end use certificate, apart from contending failure on the part of the Department to record the statement of the dealers and also contending manufacture and clearance of final product out of the raw material which was allegedly received under the said invoices. 14. As regards the end use certificate, the same is clearly the requirement of Notification No. 17/01 dated 1-3-2001. The condition no. 18(b) clearly requires the importer to produce to the Deputy Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant period and consumption of raw material for such final product. The same also disclose necessary entries with reference to the invoices in question. But the fact remains that, pursuant to the investigation and issuance of the show cause notice, the defence taken by the respondents which clearly raised doubt about the genuineness of those entries and those documents in relation to the month of July, 2001 and particularly with reference to the material covered by the said invoices in question, the primary burden upon the Department having been discharged, it was necessary for the respondents to establish the defence with cogent evidence. 15. Once the respondents clearly admitted about the absence of genuineness of the vehicle numbers which are stated to have transported the material described under the invoices in question, the burden was upon the respondents to establish that the material thereunder was actually delivered to and received by the respondents. 16. It is true that the records do not disclose any statement of the dealers having been recorded by the Department. But, I fail to understand, as to how that could be relevant to decide the issue in question. Beside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly passed the modvat credit on paper of duty paid on final products. If the appellant has not manufactured the final products by not using said goods then why he has paid the duty on final goods, which should then be refunded to them. 18. At the outset, it is to be noted that the contents reproduced above are in relation to the grounds to assail the order passed by the adjudicating authority. The contents are not in relation to the factual matrix. There is no statement of fact either in the earlier portion of the memo of appeal or even in the grounds of appeal including in the ground (J), quoted above, that the material described under the invoices in question and allegedly received by the respondents was actually utilized for manufacture of final product. Apart from relying on the end use certificate in that regard, there is no statement of fact made in that regard by the respondents either before the adjudicating authority or before the Commissioner (Appeals). Even in the present appeal before the Tribunal, the respondents have not come forward to file any affidavit with necessary documentary proof that the material which is described under the invoices was received by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the goods from the supplier to the buyer, some of the numbers belonged to auto-rickshaws, motorcycles and some numbers did not exist. The fact that out of the list of vehicles which were shown to be tankers, according to RTOs Office, two vehicles turned out to be regular carriers of goods does not establish that the case of other vehicles also it was true. An exception cannot make a rule. Once it is established that the input has not been transported in the vehicle mentioned in the invoice it is but reasonable to say that the inputs were not received in the factory as required under Rule 57G . 20. Considering the decision in Ranjeev Alloys Ltd. s case (supra), as rightly submitted by the learned DR, the Commissioner (Appeals) was not justified in placing reliance in the decision of M/s. Neepaz Steels (supra), which was a decision by the Single Member of the Tribunal, apart from the fact that the same was delivered in the peculiar facts of that case which are revealed from para 4 of the decision which are not in pari materia with the facts in the case in hand. 21. The decision in M/s. Tata Iron Steel Co. Ltd. s case (supra) was also of a Single Member and was based solely o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
