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TMI Blog2008 (6) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... equivalent amount of the penalty imposed on the company and also penalty on the other appellants, on the ground that the input "Ketonic Resin" was not capable of being used in the final product i.e. dispersion dyes manufactured by the appellant company and also held that the said inputs were not actually received by them in the factory and used in the manufacture of final product. The adjudicating authority came to the conclusion that the appellant company has availed credit on the said Ketonic Resin without using the same and hence such credit needs to be reversed and he ordered accordingly. The appellants aggrieved by the order-in-original preferred an appeal to the Commissioner (Appeals), who vide his order dated 25-7-2007 held that "Ketonic Resin" can be used by the appellant in the factory for the manufacture of dispersion dyes. At the same time, he came to the conclusion that two consignments of "Ketonic Resin" on which the appellant had availed credit were not received by the appellant in the factory premises, hence the confirmation of the demand is liable to be upheld and the consequent penalties are also liable to be upheld. These appeals are against such order. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial was not in the stock. It is his submission that the invoice mentioned the vehicle number whose owner was interrogated by the Revenue authorities and in a statement recorded under Section 14, the said owner confessed that he had never given vehicle to M/s Rathi Dye Chem (P) Ltd., to bring any such material nor the vehicle has lifted any material from the godown of M/s. Arihant Chemicals The Ld. SDR would also point out that the statements of the stores in charge of the appellant company is very clear and it shows that the appellant company has not received the 'Ketonic Resin' against invoice No. 3236 dated 16-1-2004. He would submit that similarly as regards receipts of various invoices, the vehicle number shown in the invoices were different from the vehicle numbers entered against the aforesaid invoices in the gate register. He would further submit that the affidavit of the supplier of the materials was subsequent to the investigation and can be considered only as an act of afterthought. 5. Considered the submissions made by both sides and perused the records. The findings of the Ld. Commissioner (Appeals) as regards the use of 'Ketonic Resin' in the appellant's factory fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remained there till 7.30 p.m. on 17-1-2004. If this was true, the said vehicle could not have transported any Ketonic Resin on 16-1-2004 or 17-1-2004 as made out. The engagement of vehicle up to 7.30 p.m. of 17-1-2004 was corroborated by the statement of Shri V.M. Vartak recorded on 23-2-2004. Similarly, in respect of invoice numbers 3162 dated 8-3-2002; 165 dated 18-4-2002; 436 dated 13-5-2002 and 1678 dated 29-8-2002, it was found that vehicle numbers shown in the invoices of M/s. Arihant Chemicals were different from the vehicle numbers entered against the aforesaid in voices in the gate register. The affidavits of Shri Bhupendra Sakaria, Managing Director of M/s. Arihant Chemical evers that they had been selling Ketonic Resins to appellants during the period 1999-2000 to 2003-2004. The annex urn to the affidavit shows that Ketonic Resins were sold to appellants M/s. Rathi Dyechem inter-alia vide invoice Nos. 3162 dated 8-3-2002; 165 dated 18-4-2002; 436 dated 13-4-2002 and 1678 dated 29-8-2002. It does not say anything about the actual receipt of the material in the appellant's factory and does not offer any explanation as to why there was a change in the vehicle numbers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athi Dye Chem. Pvt. Ltd. having its factory at 40, MIDC. Dhatav, Roha District - Raigad for more than 10 yrs. Along with other chemicals as per their requirement. The product Ketonic Resin UK 100/UK 1000 is supplied from the stocks available at godown at Bhiwandi under dealer's invoice or sometimes directly dispatched from the factory premises of the manufacturer under the manufacturer's invoice. In case the product is dispatched from the manufacturer directly then, M/s. Arihant Chemicals and Resins (I) Pvt. Ltd. is raising commercial invoice. All the time delivery was arranged by M/s. Arihant Chemicals and Resins (I) Pvt. Ltd. to the factory of M/s. Rathi Dye Chem. Pvt. Ltd. as the terms were free delivery to Roha factory. The supplied product is received by M/s. Rathi Dye Chem Pvt. Ltd. at their factory at Roha and M/s. Arihant Chemicals and Resins (I) Pvt. Ltd. received payment for the supplied made up to date. A statement showing details such as invoice number and date, Quantity supplied, Value, details of transport, amount received for supplies made, payment details, etc. I hereby state that M/s. Arihant Chemicals and Resins (I) Pvt. Ltd. had time to time supplied and deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to have been made as an after thought. I find from the photo copies (procured by appellant from the seized documents) of the year end stocks inventory, as conducted by the statutory auditors in the factory premises of the appellant company, there being recorded balance of the physical stock of Ketonic Resin UK 100. The Revenue has not produced any other contrary evidence to such over whelming evidence as regards the physical stock of Ketonic Resin being noted by the appellant in their Kardex record and verified by the statutory auditors. To my mind the appellants have made out a very strong case in their favour. Hence it is held that the appellant company has received the input 'Ketonic Resin' in their factory and put to use the same. 9. In view of the above reasonings, the appellants have clearly established that they were receiving input "Ketonic Resin UK 100" in the factory premises and were consuming the same for the manufacture of disperse dyes. In view of this, the findings of the Ld. Commissioner (Appeals) seems to be totally erroneous and are unsustainable. Accordingly, in the facts and circumstances of the case, the impugned order to the extent it upholds the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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