TMI Blog2004 (6) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... r vehicle parts. The company had also been working under the Modvat Scheme. The appellant No. 2 is the Managing Director while the appellant No. 3 is Manager (Accounts) of the Company. The officers of Central Excise visited the factory premises of the company at Gurgaon on 12-5-2000 but no discrepancy in the finished goods and raw materials (inputs) in stock was found. They again visited the factory on 23-11-2000 and as a result of physical stock taking, no discrepancy was found in the finished goods and the raw material in their record. Thereafter on 7-2-2001, the officers paid surprise visit to the factory of the company and cenvatable inputs involving duty of Rs. 17,290/- were found short and some inputs were found lying in the stock in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. The imposition of penalty was also proposed in the show cause notice. In their reply to the show cause notice, the appellants denied all the allegations. The adjudicating authority passed the impugned order. 3.The learned Counsel has contended that the demand for clandestine removal and manufacture of the goods has been raised on the basis of excess use of one of the inputs i.e. steel used in the manufacture of steering wheels and use of parallel invoices by the appellants during the period in dispute. But there is no convincing evidence to substantiate these allegations. The demand has been confirmed only by raising presumptions, assumptions wrongly. For contesting the confirmation of demands on the goods/inputs found short and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been worked out taking into account the total number of steering wheels cleared by the appellants during that period. In our view, on these basis, no presumptions regarding the clandestine manufacture and removal of the steering wheels during the period in dispute, by the appellants could be legally drawn. No technical opinion had been obtained during the investigation regarding the average quantity of the steel metal required for the manufacture of each steering wheel. The appellants are admittedly manufacturing various types/designs of steering wheels suitable to different models/types of motor vehicles. Therefore, the size and weight of one type of steering wheels will differ from that of other types and similarly, the quantity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the period in dispute, had been also brought on record. 7.In the face of above referred circumstances, the clandestine manufacture and removal of the goods on the part of the appellants could not be presumed from the mere alleged excess use of one of the inputs (steel) by them during the disputed period. In this context, reference may be made to the ratio of law laid down in Kamanwala Industries Ltd v. CCI, Aurangabad, 2003 (152) E.L.T. 126 (T) = 2003 (55) RLT 98, wherein charge of clandestine manufacture and removal of inputs was based on quantity of manganese alloy or silicon manganese purchased and converted and then used as per theoretical ratio for production of ingots, but the same was quashed by the Tribunal. Similarly, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to prove this allegation. There is nothing on record to suggest if any show cause notice was issued to M/s. PPAI along with the appellants, for manufacture and removal of goods in a clandestine manner. From the statement of representative of M/s. S.S. Spares to whom the goods were supplied, it is evident that said firm purchased the goods from M/s. PPAI and made payment through cheque. Similarly, the receipt of goods from that firm has not been denied by M/s. Chadha Autolines, the buyer. It is not the case of the department that M/s. PPAI was dummy unit created only on paper by the appellants as no charge of clubbing of the clearance of that firm with that of the appellant company, had been made in the show cause notice. 9.It is well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andran, Manager (Accounts) of the appellant company whose statement was recorded during investigation. The goods which were received under 57F challans were returned by the appellants after removal of defects as we find from the record. Therefore, the Cenvat credit on the rejected goods, received under duty paying documents and utilized as inputs by the appellants, could not be disallowed. The impugned order confirming duty of Rs. 6,86,034 by denying the Cenvat cannot be sustained and is set aside. 12.In view of the discussion made above, part of the impugned order regarding the confirmation of duty of Rs. 21,501/- and Rs. 17,290/- on company appellant No. 1, is upheld, while the rest of the impugned order against all the appellants is se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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