TMI Blog2004 (6) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... rders the Commissioner directed to reverse Modvat credit amounting to Rs. 51,55,642/- alleging that the credit was wrongly taken by the appellant. The Commissioner confirmed the demand invoking proviso to Rule 57-I(1)(i) of Central Excise Rules, 1944. Apart from ordering payment of interest a penalty of Rs. 2,50,000/- was imposed under Rule 173Q. As against the Directors penalty @ Rs. 1 lakh each and Manager a penalty of Rs. 50,000/- were imposed under Rule 209A of the Central Excise Rules. 2. The appellant, Shabana Steels Pvt. Ltd. is engaged in the manufacture of excisable goods, namely, MS ingots falling under sub-heading 7206.90 of Chapter 72 of the Schedule to Central Excise Tariff Act, 1985. They had opted for the modvat scheme at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to be reversed and recovered. There was a proposal for imposition of penalty under Rules 173Q(1), 173Q(2) and 9(2) of the Central Excise Rules. The purport of the allegation against the appellant was that they had purchased their main raw material, namely, MS scrap from ship breakers as well as traders and re-rolling mills under cover of Gate passes or endorsed gate passes even though the scrap purchased was allegedly never the original consignments, as depicted in the accompanying duty paying documents and was non-duty paid. Therefore, the credit was availed in contravention of provisions of law with intent to evade payment of duty and that the duty paying documents were obtained by the appellant fraudulently in collusion with scra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand, the documentary evidence in the case would show that the appellant have rightly availed the credit on such inputs. The credit was availed on the basis of GP1s/endorsed GP1s which bear the seal and stamp of the originating Range office. The authenticity and genuineness of these documents had not been challenged by the department. Consignments of inputs were actually received in the factory of the appellant and entered in raw material account i.e. Form IV Account as well as RG 23A (Parts I II) Account. Inputs were utilised in the manufacture of the declared final products which were subsequently cleared on payment of duty. The abstracts of RG 23A/Parts I II as also the relevant GPls/endorsed GPls were regularly filed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of inputs sold by them. 5. It is contended by the appellant that they had availed such credit purely on the basis of duty paying documents like endorsed gate passes accompanying the consignments of goods received in the factory during the relevant period. The credit was availed by the appellant equal to the amount of duty shown in the gate passes and the appellant have received such inputs as per description given therein. The appellant submits that to invoke the extended period of limitation under Rule 57-I read with Section 11A the burden is on the department to prove that there was deliberate suppression or misstatement of facts on the part of the appellant with intent to evade payment of duty. Even though, such elaborate cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find it difficult to accept the finding of the Commissioner on the issue of limitation. None of the statements relied on by the Revenue would go to show that there was any positive action on the part of the appellant colluding with their supplier to evade payment of duty. The statements would only go to show that when the scrap obtained from different sources are stored together and supplied therefrom to the appellant it was not possible to identify the original source of each consignment meant for the appellant. As far as the appellant is concerned they have availed credit purely on the basis of duty paying documents like endorsed gate passes accompanying the consignment goods received in the factory during the relevant period. The cr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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