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TMI Blog2002 (6) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise visited the factory premises of the company on 23-12-1999 and carried out the physical checking and found 1,49,347 kgs of crushed/broken pieces of Acrylic as against recorded balance of 1,77,441 kgs and 400 kgs. of DBP (Plastisizer) as against the recorded balance of 1,77,441 kgs in Form IV register. Besides this, 1,329 kgs. of acrylic sheets (finished goods) were found in excess of the recorded balance in RG-1 Register involving duty of Rs. 19,138/-. It was also detected that the inputs lying in the factory premises were quite different from the description thereof, as given in the bills of entry through which the same were imported. The inputs were detained and representative samples were drawn from all the lots, for chemical examination. The detained goods were subsequently seized by the Officers of the DRI on 4-2-2000. From the report of the examiner, it revealed that the material imported against the above referred bills of entries, was different than the one which was lying in the factory premises. The company was issued show cause notice for disallowing the Modvat credit of Rs. 11,56,607/- which it had taken on those goods. The duty of Rs. 3,920/- payable on the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods by the appellants as they were never subjected to cross-examination. The impugned order has been passed without application of mind as the dispute has been raised in the show cause notice only regarding the goods covered by two bills of entries dated 29-7-1999 and 16-11-1999 vide which the goods were cleared from ICD/TKD and ICD/PPG ports respectively, whereas in the impugned order the adjudicating authority has referred to the third Bill of Entry also dated 1-10-1999 and concluded that the goods of this bill of entry were also not received in the factory. He has travelled beyond the show cause notice. The learned Counsel has further argued that earlier show cause notice dated 28-12-1999 was issued vide which the Modvat credit was sought to be disallowed in respect of the same goods imported through the above referred bills of entries not on the ground that those were substituted or replaced, but on the ground that they had availed the Modvat credit without production of original duty paying documents. According to the learned Counsel, the impugned order is bad in law and deserves to be set aside. 5.On the other hand, the learned JDR, has simply reiterated the correctnes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present ground on which now the Modvat credit has been sought to be disallowed to the appellants, was not taken in the earlier show cause notice. From the perusal of the above said earlier show cause notice, it is also evident that the Department did not dispute the receipt of the imported goods covered by the above referred three Bills of Entries, in the factory premises of the appellants. This circumstance is enough to belie the subsequent version of the Department that the imported goods covered by the above referred three Bills of Entries were never received in the factory of the appellants and that the Modvat credit has been fraudulently taken on some other substituted/ replaced goods. 8.The Commissioner in the impugned order, no doubt, has observed that the goods actually found in the factory of the appellants during the visit were of mixed multi-colour with size varying from ½ inch to 2.5 inches. While the Chemical Examiner report dated 10-1-2000 with respect to the three representative samples drawn from different lots, showed that the goods were in the nature of waste/scrap with irregular shape, size and of assorted colours. Therefore, the goods did not correlate with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port Carrier, Patparganj, that two containers were lifted and loaded in his truck and the goods of those containers were unloaded at the premises of M/s. Gayatri Exports at Siraspur, Delhi, could not be used against the appellants as none of them was subjected to cross-examination by the appellants for questioning the correctness of their evidence. Their statements were recorded at the back of the appellants. Moreover, as observed above, the off loading of the goods at the premises of M/s. Gayatri Exports did not lead to any irresistible conclusion that those were disposed of to that company or to some other third party by the appellants for want of any evidence to prove this fact and especially when in the earlier show cause notice dated 28-12-1999, the receipt of the imported goods in the factory premises of the appellants covered by the disputed Bills of Entry, was not disputed or questioned for disallowing the Modvat credit in respect thereof of this very disputed amount. The statements of appellants No. 3 4, namely, Shri Kapil Dev Aggarwal and Shri Braham Dev Jha respectively, that the acrylic raw material was received in the same form in which it was lying in the factory an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Authorities at the time of allowing the clearances. There is nothing on the record to suggest that the Customs Authorities had ever seized the goods on the ground of mis-description. The goods were cleared without any objection by the Customs Authorities after due verification. The appellants when took the Modvat credit in respect of those goods, the objection taken by the Excise Department at the first instance was that they did not produce the original documents as is evident from the first show cause notice dated 28-12-1999. The clandestine removal of the imported goods could not be presumed by the adjudicating authority on the basis of above referred reports of the Chemical Examiner. It is well settled that the findings regarding the clandestine removal have to be based on the tangible and concrete evidence and not on the basis of presumption and assumptions. In this context, reference may be made to the case of M/s. Oudh Sugar Mills Ltd. v. UOI, 1978 (2) E.L.T. (J172), wherein the Apex Court has so ruled. 12.In the light of facts and circumstances, referred to above, the Modvat credit of Rs. 11,56,607/- in respect of the imported goods (inputs) covered by three Bills of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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