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TMI Blog2008 (9) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant are engaged in the manufacture of Non-Alloy Steel Ingots falling under Chapter 72 of the Schedule to Central Excise Tariff Act. Brief facts of the case are that M/s. Tata Iron & Steel Company Limited (TISCO) has a stockyard at Mandigobindgarh in the State of Punjab where they deal in various items of iron and steel viz tandish jam, pooled iron, bloom butt clear, hot strip mill, HSM coil box CO. rejected scrap ingot etc. The said stockyard is separately registered under Central Excise Act/Rules. TISCO appointed M/s. Adhunik Steels Limited, Mandigobindgarh as consignment agent. M/s. Neepaj Steels (India) at Mandigobindgarh also deals in iron and steel goods. Acting on information that Modvat/Cenvat credit was being fraudulently passed on and taken on the basis of fictitious transportation of goods from TISCO, Mandigobindgarh, the preventive staff of the Central Excise Department visited the said premises of TISCO at Amloh Road, Mandigobindgarh on 16-5-2001. After resuming the sale invoices of the company for the financial year 2000-01, the verification of the vehicles supposedly used for transporting the goods was got made. Verification revealed that a large number of vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts of the stock-yard are also maintained by M/s. Adhunik Steels Limited who manage the staff and workers there. Shri Sushanta Banerjee further stated that their sales office at Jalandhar (now Ludhiana) issues offers to various customers of the materials and after receiving advance payments through cheques/drafts from them, issue delivery orders with intimation to the stock yard against which goods are delivered to the customer from there. M/s. Adhunik Steels Limited as the consignment agent is paid handling charges by TISCO, Jamshedpur. Shri Banerjee further revealed that the vehicles are arranged for transportation from stock-yard to the customer's premises by the customers themselves. Deliveries are made to them on ex-stock yard basis, and as such transportation charges/onwards freight are borne by the customers themselves. Only loading charges are borne by M/s. Adhunik Steels Limited on behalf of TISCO which are reimbursed to them. A specific question was put to Sushanta Banerjee about the alleged use of light vehicles such as scooters, mopeds, cars, tractors, tanker etc. for carrying iron & steel items to which his answer was that the vehicle numbers appear to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce by trucks. He however admitted that the goods in question cannot be transported by light motor vehicles. He further admitted that the goods were transported and sent to them by M/s. Neepaj Steels (India) without issue of any GR etc. in support of the consignment. He failed to give any convincing answer to the question that in absence of any record showing dispatch of scrap/material by M/s. Neepaj Steels (India), the same could be received by M/s. Ranjeev Alloys Limited particularly when the vehicles shown in the invoices were incapable of carrying the materials. 7. On the basis of the said statements and the result of enquiry show cause notice was issued to the appellant as well as TISCO, Mandigobindgarh, M/s. Adhunik Steels Limited, M/s. Neepaj Steels (India) and Shri Rattan Paul Bhatia, Shri Sushanta Banerjee and Shri Nirmal Kumar Aggarwal. On consideration of their replies which they filed, the Deputy Commissioner by the impugned order rejected their defence and disallowing Cenvat/Modvat credit to the tune of Rs. 56,062/- to the appellant, directed that the same be reversed with interest. Penalties were imposed on all the noticees including the appellant except Shri Rattan P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Single Member Bench for final disposal. But being prima facie of the view that the decisions of the Single Member Benches - referred to in the reference order - that credit cannot be denied merely on the ground that the vehicles mentioned in the concerned invoices are fictitious, was not correct - bordering on perversity, we decided to hear the appeal finally drawing support from the decision of the Division Bench in M/s. Viraj Alloys Limited (supra). 10. We are conscious of the fact that some of the decisions of the Single Member Benches referred to above were challenged by the Revenue in the Punjab and Haryana High Court by way of appeal under Section 35F of the Central Excise Act which were dismissed vide 2008 (230) E.L.T. 218 (P&H) = 2008 (87) RLT 465 (P&H) (CCE, Chandigarh v. Neepaz Steels Limited & Ors). Following the said order, the appeals in the cases of Nirmal Kumar Agarwal and M/s. Adhunik Steels Limited (CEA Nos. 14-19 of 2008 dated 4-7-2008) were also dismissed on 7-7-2008. However, on a bare reading of the High Court's order in M/s. Neepaz Steels (India), it is evident that the High Court declined to interfere in the matter on the ground that the Tribunal had record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench in Viraj Alloys Limited (supra). 12. The vehicles in question by which the goods were allegedly transported on sale by M/s. Adhunik Steels Limited as consignment agent of TISCO, Mandigobindgarh are PB 23 6412 and PUV 1796. While the former was a tractor, the latter was a scooter. The appellant cannot contend to the contrary as the finding is based on the report of the concerned Regional Transport Officer after due verification. 13. Learned Counsel for the appellant however submitted that the invoices in question are documents of transactions between M/s. Adhunik Steels Limited on behalf of TISCO, Mandigobindgarh on the one hand and M/s. Neepaz Steels (India) on the other hand and the appellant is in no way connected. In other words, according to the Counsel, there is no linkage or connection between transport of goods by M/s. Adhunik Steels Limited at the first in stance and onward transportation by M/s. Neepaz Steels (India) to the appellant. Learned Counsel also submitted that the allegations about the vehicles being either tractor or scooter are being made for the first time in the Tribunal and the appellant has had no opportunity to reply to them. 14. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding against the appellant. The invoice of M/s. Neepaz Steels (India) in favour of M/s, Ranjeev Alloys Limited refers to receipt of goods by M/s. Neepaz Steels (India) from TISCO, Mandigobindgarh under invoice Nos. 501 and 502 dated 9-8-2000. Invoice No. 501 refers to transport of goods by vehicle No. PUV 1796 in the relevant column. 17. As the relevant particular in the two sets of invoices tally in all respects, it is established that what was sold and allegedly transported from the stock-yard of TISCO, Mandigobindgarh under Excise Invoice Nos. 500 and 501 dated 9-8-2000 to M/s. Neepaz Steels (India), was in turn allegedly sold and transported to appellant M/s. Ranjeev Alloys Limited respectively under Invoice Nos. 67 and 66 dated 10-8-2000. If the alleged transport by vehicle no. PB 23 6412 which was a tractor or vehicle no. PUV 1796 which was a scooter, was fictitious, there could not be another sale and transport of the goods by M/s. Neepaz Steels (India) to the appellant and therefore, it would follow, the credit taken by the appellant on the basis of fictitious transportation of goods was fraudulent. There can be no two opinions that there must be actual receipt of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt. Having failed to establish that they actually received the goods, they were clearly not entitled to take any Cenvat credit and therefore the impugned order directing them to reverse credit and confirming demand of Rs. 55062/- does not suffer from any illegality to warrant any interference. We are fortified by decision of the Division Bench in Viraj Alloys Limited (supra) and the following observations therefrom may be usefully quoted. "We observe that the department raised a presumption against the appellants by establishing that the inputs could not have been received in the factory in vehicles mentioned in the invoices. This allegation itself is based on the reports by RTOs, who certified that the registration numbers belonged to vehicles other than goods transport vehicles with 10 tons Capacity. It is for the appellants thereupon establish that indeed such vehicles as mentioned in the invoice did bring the input to their factory. They have failed to do so. Their gate register was burnt in some fire accident and the bills/vouchers indicating payment of cash to the drivers/owners of the trucks were also, destroyed in fire. One could understand that bills/vouchers, getting de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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