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TMI Blog2004 (8) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... the list of vehicles which were shown to be tankers, according to RTOs Office, two vehicles turned out to be regular carriers of goods does not establish that the case of other vehicles also it was true. An exception cannot make 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. The Commissioner as well as the ld. SDR relied on the case of A.N. Guha Co. cited supra wherein the Tribunal held that it is not necessary for the department to establish a fact with mathematical precision once a presumption as to the existence of a fact is raised against an assessee. This test is satisfied in the present case. We hold that allegation of mis-declaration is established inasmuch as the appellants took credit of duty paid on the inputs which were not received in the factory. Thus the entries made in the RG 23A, Parts-I and II are false. In such a situation extended period can be invoked for denying Modvat credit. The ld. Advocate contended that Section 11AC is not invokable when Modvat credit is dis-allowed. We observe that recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Moheb Ali M., Member (T) 1. These appeals arose out of the order of Commissioner of Central Excise, Mumbai, Thane-II. 2. The facts are that M/s. Viraj Alloys Ltd. is engaged in the manufacture of S.S. Bars and Billets falling under Chapter 72 of CETA, 1985. They use ship breaking scrap as one of the inputs in the manufacture of the above said goods and avail of Modvat credit of duty paid on such scrap. It appeared that the ship breakings scrap was mostly received from ship breakers situated in Mumbai and Alang. During the course of investigation, the registration number of the vehicles used for transportation of the said inputs shown in the modvatable invoices issued by the suppliers of the scrap ware checked with the Regional Transport Offices situated in Mumbai, Thane, Nasik etc. Such a verification revealed that the vehicle numbers listed in annexure A to the show cause notice were found to be of Motor Cycles, Delivery Vans, Tanker, Auto Rickshaw, Bus, Dumper etc. It is alleged that the appellant company has not received the inputs in to the factory as such inputs could not have been transported in the above type of vehicles. The officers recorded the statements of all the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts confirmed that they issued invoices under Rule 52A of the Central Excise Rules; that they received payment for the scrap by way of cheques issued by M/s. VAL; that the inputs were used in the manufacture of final products; that the department never disputed that the appellant manufactured final products and cleared them on payment of duty; that they maintained proper records of all inputs received by them as reflected in RG 23A Part-I; that the whole case was made out on the reports of the RTOs purported to be saying that the vehicles used for transporting the scrap were non-transport vehicles; that it is common knowledge that the vehicle owners converted their vehicle into transport vehicles without knowledge of the RTO; that the appellant cannot be held responsible for irregularities committed by transport owners; that in at least two cases it turned out that at least in his cases the vehicles shown as tankers in RTO records were actually converted into goods transport vehicles much before 1996 that the department failed to establish as to what happened to the scrap purchased if it was not received in the appellants factory; that it is settled position in law; that for demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of A.N. Guha and Co. v. Collector of Central Excise, Bhubaneswar [1996 (86) E.L.T. 333 (Tribunal)] wherein the Tribunal held that cases of clandestine removal, it is not possible for the department to prove the same with mathematical precision. The department is deemed to have discharged their burden if they place so much of evidence which, prima facie, shows that there was a clandestine removal. The onus in that event shifts on to the appellants to prove that there was no clandestine removal. He argued that in the present case no clandestine removal was involved but the principle laid down by the Tribunal applies. He argued that Supreme Court's decision in D. Bhoormull's case - 1983 (13) E.L.T. 1546 (S.C.) is applicable in the present case. The appellant failed to even produce the gate registers which would indicate the receipt of goods into their factory or the bills/vouchers indicating the payment of transport charges on the specious plea that they were all destroyed in fire. The appellant therefore failed to establish that the inputs were received in the factory. Modvat credit taken on inputs, which were not received, was rightly denied by the Commissioner. He argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 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 inputs could not have been received in the factory in vehicles mentioned in the invoices. This allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid case some vehicles in which inputs were carried proved to be other than goods transport vehicles, but the Tribunal gave the benefit of Modvat credit because transporters admitted that the goods were transported. No such corroboration exists in the present case. Moreover the Cost Auditor appointed by the Commissioner in his report stated that he had verified the stock of inputs lying in the factory during the disputed period in that case. We therefore hold that the ratio of that decision does not apply to the present case. 13. We hold that allegation of mis-declaration is established inasmuch as the appellants took credit of duty paid on the inputs which were not received in the factory. Thus the entries made in the RG 23A, Parts-I and II are false. In such a situation extended period can be invoked for denying Modvat credit. The ld. Advocate contended that Section 11AC is not invokable when Modvat credit is dis-allowed. We observe that recovery of credit wrongly availed of or utilised in an irregular manner is provided under Rule 57-I. The Commissioner invoked Rule 57-I(4) and Rule 57AH(2) of the Central Excise Rules read with Section 11 AC for imposing a penalty of equal amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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