TMI Blog2009 (11) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... ident and Shri Rakesh Kumar, Member (T) Shri Anil Khanna, DR, for the Appellant. Shri B.L. Narasimhan, Advocate, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President]. - Heard at length the learned DR for the appellants and learned Advocate for the respondents. Perused the records placed before us including the order No. 396-398/05-B dated 1-3-2005 passed in Appeal No. E/1458 to 1460/04-B. 2. The appellants challenge the order dated 1-12-03 passed by the Commissioner, Ludhiana whereby the Commissioner has restricted the disallowance of the credit to the tune of Rs. 44,09,228/- instead of the amount of Rs. 4,08,71,796/- claimed by the department under show cause notice dated 31-1-2002. 3. The respondents have their factory at Doraha, Ludhiana and are engaged in the manufacture of woollen yarn, acrylic yarn and woollen blended yarn. The products manufactured by the respondent fall under Chapter 51 54 of the first Schedule to the Central Excise Tariff Act, 1985. Acting upon intelligence report regarding alleged involvement of the respondents in evasion of excise duty by fraudulently availing the Modvat credit in relation to the raw materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the High Court. On the other hand, it has been submitted by the learned Advocate for the respondents that apart from the difference in amounts, the issue as such involved in both the matters is one and the same, and considering the fact that the order of the lower authority having already merged in the order already passed by the Tribunal, the present appeal would not lie. He however fairly submitted that the respondents have no objection if the matter is also considered on merits. 8. It can hardly be disputed that the issue involved in the case in hand relates to diversion of inputs in relation to which the Modvat credit is sought to be claimed pertaining to the duty paid thereon. In this regard, the issue involved in the appeal already disposed of was not different. It is, however, true that while deciding the earlier appeal, the Tribunal had restricted the disposal of the appeal to the extent the matter was sought to be agitated before the Tribunal in the said appeal and, therefore, it would not be appropriate for the Tribunal to reject the present appeal on technicalities. Indeed, para 18 of the order dated 1-3-05 by the Tribunal in the earlier appeal clearly states that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to para 3.12, 3.13 and 3.14, learned Advocate submitted that the Commissioner after taking note of the verification of the records maintained by the respondents has held that the appellants were able to establish allegation only to the extent of Rs. 44,09,228/- which has also been set aside by the Tribunal in the appeal filed by the respondents. He further submitted that the appellants have not been able to establish even from the verification of the records that the respondents had failed to utilize the inputs for manufacture of their final product. Merely because initially the inputs were received by the dealers of the respondents that can not lead to a conclusion that those inputs were never received by the respondents and were not utilized by the respondents. More particularly, in view of the fact that receipt of those inputs and utilization thereof by the respondents is clearly reflected from the statutory records maintained by the respondents which were duly verified and confirmed by the authorities. He has also drawn our attention to the fact that the practice followed by the respondents in receiving the inputs through the dealers was made known to the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the facts like dispatch of inputs in the name of the respondents, delivery thereof and receipt by M/s. Ashish Enterprises or M/s. Bhawana Enterprises, transportation of inputs from the manufacturer to those dealers of the respondents etc. The test report also discloses that some of the final product did not disclose presence of PFY as one of the elements having been utilized in the manufacture of such final product. As against this, it is equally true that the stock verification records maintained by the respondents did not disclose any infirmity which could reveal non receipt of any part of such inputs which were allegedly diverted to other parties. Undisputedly, the records do not disclose infirmity of any sort inspite of the fact that some of the final products revealed absence of PFY element therein, nor the records disclosed any discrepancy which could reveal and/or co-relate to the inputs allegedly diverted to other parties. In fact, as rightly observed by the Commissioner, there appears to be no attempt made at any point of time in the course of investigation to establish such co-relation between the inputs alleged to have been diverted and the final product which was f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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