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TMI Blog2011 (3) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... e of damaged Yarn by them. There is virtually no evidence on record to reflect upon the fact that such damaged Yarn received by the customers was not actually used by them. The Revenue s case is based upon the sole fact that the some of the damaged Yarn was found in the appellant s premises, (which stands explained by him being only a part quantity) and fact of receiving the insurance claim. As already observed, such facts by itself cannot lead to an inevitable conclusion that the Yarn actually sold by the appellants to their customers was only with an idea to pass unauthorized modvat credit to them - the impugned order confirming demand and imposing penalty on the dealer unit is set aside - Decided in favour of assessee - E/1337 & 1338 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave taken the credit and use the same for payment of duty on the final products. However, it is seen from the order of Commissioner (Appeals) that he has observed that the manufacturing unit has not availed any credit on account of lack of papers. He has not dealt with the appellant s stand that such credit was availed by the dealer unit, who had actually sent the goods to the job workers and received back and cleared on payment of duty. 3. After considering the above submission, I find that the fact of sending the imported raw material to the job worker, receiving it back and clearing the same on payment of duty by using the credit account of dealer unit, is not in dispute. What is in dispute is as to whether dealer unit has availed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and deteriorated quality of Yarn was actually used by them or not. It is not disputed that the yarn was cleared by them by adopting the lower value and reversing the credit. In the absence of any evidence to show that their customers have not actually used the Yarn, the above reasoning of the department carries no weight. In any case, submits the learned advocate that the appellants having debited their modvat credit, at the time of clearance of the goods, is deemed to have paid back the credit so availed by them. As such, subsequent confirmation of demand against them amounts to double duty confirmation, which is not justified. As against the above plea of the appellants learned DR submits that there is no one to one co-relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. As already observed, such facts by itself cannot lead to an inevitable conclusion that the Yarn actually sold by the appellants to their customers was only with an idea to pass unauthorized modvat credit to them. In the absence of any investigation conducted at the buyer s end and any evidence on record to show such non use by the buyers, the findings arrived at by the lower authorities have to be held as based on surmises and conjectures and the same cannot be upheld. Accordingly, that part of the impugned order confirming demand and imposing penalty on the dealer unit is set aside. In a nutshell, appeal No. E/1337 relating to manufacturing unit is remanded and appeal No. E/1338 of the dealer unit is allowed with consequential relief. B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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