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TMI Blog2015 (9) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as other suppliers in Raipur, Bhilai, Guwahati and Hissar. 4. On the basis of specific information that the noticee No.1 M/s. Bhanu & Steel Co. Ltd. Fraudulently availed modvat credit of duty paid on inputs and capital goods on the strength of duty paying documents procured by them without actual receipt of inputs/capital goods. Accordingly the Central Excise authorities on 26.08.1995 searched the premises of the appellants and resumed a number of documents not only from the factory premises but also the business premises connected with the appellants. On verification of the stock of input and output, the Central Excise authorities made out a case that there was a shortage of 2620.800 MT of slabs. On further verification on 28.8.1995 and 29.8.1995, stock of 76.62 of M.S. Plates (final product) valued at a Rs. 11,89,650/- was found to be in excess of the stock shown in the statutory record. The excess M.S. Plates were seized. 5. Shri Yashwant Singh Bisht, DGM and Shri B.R. Bishnoi, Excise Officer of the Noticee No.1 in their respective statements accepted the shortage of 2620.800 MT Slabs and were satisfied with the manner of stock taking and they further deposed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke documents and no goods as shown in these documents actually had been received by them. This position was confirmed by the concerned manufacturers who were shown to have supplied the goods as per fake invoices and such manufacturers were in fact found with no manufacturing facilities to produce the inputs in question. The vehicles which were mentioned in the documents were found to have been transporting tea on the particular dates and issuance of fake documents were admitted by all the concerned Noticees. Moreover, Shri Anup Bishnoi, Managing Director of M/s. BISCO in his statement dt.2.7.96 admitted the irregularities and also express his willingness to pay the duty evaded. 11. The matter was taken by the adjudicating authority, Indore vide adjudication order No.94/Commr./CEX/IND/2005 dated 28.11.2005. After analysing all the facts, statements of various suppliers and statement of Shri Bishnoi and statements of various transporters, he came to the conclusion that the goods i.e. MS Plates weighing 76.628 MT valued at Rs. 11,89,650/- and 88,120/- MT of MS waste & scrap valued at Rs. 7,04,960/- seized at the factory premises of the Noticee No.1 M/s. Bhanu Iron and Ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that invocation of extended period of limitation and contended that the demand should have been restricted within the normal period of six months. They also took the point that the demand should have been considered after taking into account modvat credit on inputs used in their manufacture. 15. Heard both sides and also perused the records. 16. Considered the point raised by the appellants as well as ld. JCDR, Shri S.K. Panda, Appellants have raised in issue of non-supply of non-relied upon documents. I have examined the matrix of facts. It is seen that show cause notice was issued in 1997. Matter was adjudicated on 30.7.99 vide Order-in-Original No. 35/Comm/CE IND/99 on the ground of non-supply of non-relied upon documents, Hon ble CESTAT vide their Order No. A/289-300/200-NB dated 29.3.2000 remanded the case back to adjudicating authority for denovo adjudication for passing appropriate order as denial of principles of natural justice was observed as certain documents were not returned to the appellants and defence could not be prepared effectively. 17. In pursuance to Tribunal s order as above, there has been lot of exchange of letters between the appellants and the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegations stood proved when the visit made to the premises of the notice No.1 and on verification of stock, huge shortage of 2620.200 MT of M.S. Slabs was detected. On different dates of verification, shortage of 2620.800 MT of M.S. Slabs was admitted by Shri Yashwant Singh Bisht, DGM and Shri B.R. Bishnoi, Excise officer of the appellant No.1. During subsequent verification on 27.8.95, 28.8.95 and 29.8.95 a stock of 776.628 MT of MS plates (final product) was found in excess which was seized. During a visit on 31.1.96 and 2.2.96, quantity of 88.120 MT of waste/scrap was found in excess of the stock recorded in RG-1 which was also put under seizure. From Investigations conducted from M/s.UAL, M/s.Belvedre Engineering Ltd., M/s.Bharat Industrial Structural Construction Ltd., it was found that these units were not having infrastructure to produce M.S.Slabs and they have merely issued invoices. The statement of Director confirmed that he was directed by UAL at he behest of Shri Bishnoi, Managing Director of BISCO to show the transactions only on papers. 21. Shri P.J.S.Bedi, Director of the unit, in his statement dt.27.6.96, recorded under section 14 of Central Excise Act, 1944 depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engineering Ltd., Hissar was also visited on 19.6.96 which revealed that unit was not having machines and infrastructure facilities to manufacture heavy machinery which were said to have been received as capital goods on the strength of invoices issued by M/s. Belveder Engineering Ltd., Hissar. The Central excise officers also found that the said unit was not having proper electricity connection for manufacture of such heavy machineries said to have been manufactured and supplied by them. Shri Lalit Singhla in his statement dt.19.6.96 deposed that their unit was registered with DIC and the unit had no account in banks. 24. Shri Ranjan Stephen, Director of M/s. Belveder Engineering Ltd., in his statement dt.26.6.96 recorded under section 14 of the Act deposed that he was working as Dy.General Manager (Commerical) with BISCO, Delhi. He was director of M/s. Belveder Engineering Ltd. only on paper and was not involved in any activity of Belveder Engineering Ltd. He has not invested any money in the unit. Shri Stephen in his further statement dated 1.7.96 deposed that the unit did not have any facility to manufacture the goods in question. The goods from the Hissar units said to have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of person in whose name vehicle in registered. 1. MP-24 0449 LUNA Govardhan Lal Sahu S/o Raja Ram Sahu Shankar Nagar, durg. 2. MP-24 0751 Trailor HGV Jain road Lines, G.E. road, Bhilai 3. MP-24 0892 LUNA Prushottam Mahobia S/o Chotelal Mahobia, VIII. Khairapara, Distt. Rajnandgaon. 4. MP-24 1072 Bajaj Super Vinita Chobey W/o A.K. Chobey, 10D Street 39, Sector-7 Bhilai 5. MP-24 0966 HGV TDV Harjeet Singh S/o A.S. Tansikka, Sunder Nagar, Near Gurudware, Bhilai 6. MP-24 A1545 TVS Champ Durga Nand Sahu S/o N.R. Sahu, Thana Bhilai Bhatti, Sector-3, Bhilai 7. MP-24 A1575 LUNA D.S. Vishwakarma S/o M. Vishwakarma, VIII Katro, P.O. Khapti, Dist. Durg 8. MP-24 A3683 LUNA Mr. Sushil Ray S/o Lakw RMD Ray, Nehru Nagar, East Bhila. 9. MP-24 A6575 HMV Open goods Shri Laxmi Carrier Corporation, 145,146 Akash Ganga complex supela Bhila 10. MP-24 A7811 Delivery Van (Bajaj) M/s Poddar agencies, Dail, Rajhara Dist. Durg. 11. MP-24 A8003 Articuhted Trailor HMV B.V. Shah S/o A.V. Shah Fancy Bazar, Guwahati. 12. MP-24 C0797 HGV TDCV Open Hans Raj Aharwal S/o Lake Dosraj Agarwal, Shastr Nagar, Supela, Bhilai 13. MP-243 CO144 HGV TDV Open Kamal Swaroop S/o Om ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case the show cause notice is issued by ADG of DGCEI. He is competent to issue such a notice. The ld. Advocate s contention that if the authorities allege that the inputs were not received in the factory it is also obligatory on them to establish as to what happened to the duty paid inputs purchased and how the appellant could have produced the final products without the inputs is not tenable. In our opinion the above issues are extraneous and therefore the department is not required to deal with them. It is enough if the fact of non-receipt is established to deny Modvat credit under Rule 57G. The ld. Advocate relied on the case of Indian Polypipes & Ors. v. CCE, Kol.I [2003 (157) E.L.T. 652 (T) = 2003 (89) ECC 249 (Tri.)]. We have perused this decision the facts in that case are completely different from the present one. We do not consider that the ratio of the decision applies in the present case. Similarly the decision in the case of Swastik Tin Works v. CCE, Kanpur [1986 (25) E.L.T. 798 (T)] also does not lay down any ratio which supports the appellant s case. We observe that the department raised a presumption against the appellants by establishing that the inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- "9. At the outset we may observe that the question as to whether there can be transport of large quantities of iron steel items by light motor vehicles, like scooter, moped, jeep, car, tractor, tanker etc. can hardly be said to be an issue . There cannot be any dispute that for claiming Modvat/Cenvat credit there must be actual receipt of the goods and where the goods are alleged or shown to have been transported by vehicles which turn out to be really scooter, moped, car etc., the inference would be irresistible that there was no actual transportation or receipt of the goods and, therefore, Modvat/Cenvat credit will not be available to the party. The question as to whether Modvat/Cenvat credit can be claimed with respect to fictitious transportation or receipt of goods can hardly be called an issue to warrant any adjudication or decision. If any issue is involved, it is an issue of fact - whether the vehicles in question are indeed light motor vehicles like scooter, moped, car etc. or they are transport vehicles like truck. Depending on the determination of this issue the Modvat/Cenvat credit can be allowed to the party subject to fulfilment and compliance of other re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st that all transactions made by M/s. Adhunik Steels Limited involving M/s. Neepaz Steels (India) and others were fictitious. Each of such transaction has to be considered as separate and independent. The appellant therefore cannot contend that in view of the judgment of the Punjab and Haryana High Court - which was rendered between the same parties in the context of seemingly similar transactions, taking Modvat/Cenvat credit by the appellant in the present case too was legal and they cannot be asked to reverse the same and demand cannot be made against them. As a matter of fact, for this reason alone, the issue involved in the appeal being an issue of fact - resulting in inevitable consequence of allowing or disallowing Cenvat credit - depending on the outcome of the issue, we proceed to consider on the merit of the case as an independent case notwithstanding favourable decisions in so called similar cases by Single Member Benches. As observed above, at the cost of repetition, if the vehicles in question were really light motor vehicles - incapable of carrying large quantities of steel and iron items, conclusion would be inevitable that there was no actual transportation or receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) being excise invoice No. 500 dated 9-8-2000 for 23.880 MTs quantity of Scrap/Indul. Scrap Tandish Jam (2) showing vehicle number as PB 23 6412 in the column Mode of Transport/Veh./wagon No. Learned Joint CDR then invited our attention to the invoice issued by M/s. Neepaz Steels (India) at page 81 of the appeal paper book being invoice No. 67 dated 10-8-2000 in favour of M/s. Ranjeev Alloys Limited i.e. the appellant in respect of 23.880 MTs of same goods i.e. Indl. Scrap (Tandish Jam-2) . The only difference being that whereas the total value of the goods in the invoice of TISCO was mentioned as Rs. 222852.94, in the invoice of M/s. Neepaz Steels (India) the value was mentioned as Rs. 220890/- a rather insignificant discrepancy. What is significant is that it refers to Invoice No. 500 dated 9-8-2000 i.e. the same invoice used by TISCO, Mandigobindgarh, in the column meant for the particulars of the supplier. It also mentions the name of the manufacturer as TISCO, Jamshedpur. 16. Learned Joint CDR made similar comparison between the invoices issued by TISCO, Mandigobindgarh in favour of M/s. Neepaz Steels (India) and by M/s. Neepaz Steels (India) in favour of the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on behalf of the appellant that wrong description of particulars of the vehicle per se cannot be at ground to deny Modvat/Cenvat credit. It was also submitted that the mis-description could be result of clerical error. It was also submitted that the onus lay on the Department to prove that the goods were not actually received by the appellant. It was submitted that there is no evidence to suggest that the goods were diverted to any other destination and used elsewhere. These submissions do not cut any ice. We are of the view that onus initially lies on the Department but having established that the vehicles in question were incapable of transporting large quantities of iron and steel items - as admitted by all concerned, the movement of goods from Mandigobindgarh stock-yard of TISCO being fake and fictitious, - an allegation duly made known to appellant by the show cause notice read with Annexure-I thereto, the onus shifted onto the appellant to prove that the goods were duly received by them and used in the manufacture of iron and steel items. We are satisfied that the appellant utterly failed to discharge the onus. It is not in dispute that they took Cenvat credit of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake 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. Learned Counsel for the appellant also took the plea that the extended period of limitation was not applicable. He submitted that the appellant was a bona fide buyer and should not suffer for the mistake of others. We find no merit in this submission either. The entire transaction was vitiated by fraud coupled with misstatement and suppression of facts with intent to evade payment of duty and, therefore, extended period was rightly applied. The act being fraudulent, imposition of penalty also does not suffer from any illegality, particularly, in view of the systematic manner in which the fraud was committed; however, taking a lenient view, the penalty is reduced to Rs. 10,000/-. 21. In the result, subject to the modification in penalty, as mentioned above, the appeal is dismissed. 32. This decision of the tribunal in the case of Ranjeev Alloys Ltd. Vs. CCE, Chandigarh was maintained by Hon ble High Court of Punjab & Haryana reported at 2009 (247) ELT 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to secure ineligibile credit. 34. From the above investigations it clearly comes out that M/s BISCO has manipulated and created fictitious units so that invoices could be procured without movement of goods and subsequently credit is availed. 35. It is also observed that confessional statements by not one but by almost everyone including M.D., Directors, DGM clearly proved non-production, issue of fake invoices and subsequent non-transportation confirming scam of paper transactions. This proves clear intent to defraud revenue. 36. Learned Counsel s pleas are not based on any principles which can come to the rescue as clear fraud is committed. Appellant have acted with malafide and attempted to defraud the revenue. All actions have been committed with pre-meditated design. Overwhelming evidence with confessional statements and fraudulent creation of units with the sole purpose to commit thievery of Revenue demolish any argument of the counsel. Actually fabrication of documents clearly point toward their attempt to enrich themselves at the cost of Revenue. 37. From the findings of Divisional Bench of Hon ble Tribunal Mumbai in the case of Viraj Alloys Ltd Vs. CCE Thane-II reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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