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2018 (12) TMI 1108 - AT - Central ExciseClandestine removal - MODVAT/CENVAT Credit - MS ingots - Kar Vivad Samadhan Scheme (KVSS) - Department has mainly relied upon the documents alleged to be recovered from the transporter Shri Rajarathina Transporters - Held that:- The department has not been able to establish the reason for applying a different formula for demanding duty for the overlapping period. It is also mentioned that when it is already concluded that the department has failed to establish procurement of unaccounted raw materials and when there is no discrepancy with regard to the stock of raw materials and finished products, noted by the department, the allegation of clandestine clearance of finished products of such huge quantity has to be supported by reliable and cogent evidence which is not present. The physical verification of stock, no discrepancy with regard to raw materials has been noted by the department. Even though statements of various traders were taken, the stock as recorded in the RG-I register and that was lying in the factory did not show any difference. The other evidence relied is with regard to the cash deposits made in the account of Shri Prem Kumar, who is the director of the company. The amounts in his Karur Vysya Bank account has been explained by him stating that he had other business of construction activities and amounts are with regard to such business. The department has rejected and not accepted this explanation. No verification has been done in this regard. Merely because there are certain cash deposits in the account of the director of the company, it cannot be concluded that these are amounts received from sale of clandestinely removed finished products - thus, the department has failed to establish the allegation that the appellant availed fraudulent MODVAT credit to the tune of ₹ 18,93,298/-. The demand on this count cannot sustain and therefore requires to be set aside - The department has not been able to establish clandestine clearance of finished products also and the demand on this count is also set aside. The department has not been able to establish the clandestine removal of goods or wrongful availment of MODVAT credit - the charges against other appellants also cannot sustain - appeal allowed - decided in favor of appellant.
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