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2012 (7) TMI 841 - CESTAT BANGALOREDemand of duty - Availment/utilization of MODVAT credit of CVD paid on HDPE granules - Imposition of penalty - Held that:- On 12-10-1995, the Central Excise Range Superintendent visited the appellant’s factory and conducted physical stock verification of the raw materials and also conducted a scrutiny of statutory records. A quantity of 4,725 Kgs. of HDPE granules of Indian origin was found in the factory and the same was noted in a mahazar; that no evidence of the imported raw materials having been received in the factory was also noted in the same mahazar. In the mahazar, it was also noted that the General Manager of the factory, who was present, stated that a quantity of 686 bags of imported HDPE granules had not been received in the factory but, nevertheless, Modvat credit was taken on that quantity also at the behest of the Management. The General Manager’s inability to produce documentary evidence of actual utilization of any part of the imported granules in the manufacture of HDPE bags was also recorded in the mahazar. Department has not substantiated their case insofar as the MODVAT credit of Rs. 2,51,399.25 is concerned. The total credit taken by the party on the three consignments of HDPE granules covered by the three bills of entry is Rs. 3,63,319.95, out of which credit of Rs. 2,51,399.25 was found to have been utilized. The unutilized MODVAT credit is the difference between these two figures. At best, to this extent, the Revenue’s case can be accepted. In the result, the denial of Cenvat credit to the extent of Rs. 1,11,920.70 is upheld and the rest of the demand raised on the appellant is set aside. In the facts and circumstances of this case, the penalty imposed on the appellant is reduced to Rs. 7,500 - Decided partly in favour of assessee.
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