TMI Blog1997 (5) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... it was also disclosed by him that the scrap was purchased from the local scrap dealers and traders was received by them on FOB basis and freight was being paid by the suppliers of the scraps. Various documents were also seized from the appellants factory. Based upon the scrutiny of the documents so seized, enquiries were conducted from the various scrap dealers who had supplied the material to the appellants. All the scrap dealers in question in their statements deposed that they had supplied the scrap to the appellants under the cover of their invoice-cum-challan. The Department conducted further enquiries in respect of the registration number for the trucks mentioned in the said invoices-cum-challans from the regional transport authorities. The said truck numbers mentioned in the challans of the scrap dealers was also reflected in the Dharamkanta slips of the Dharamkanta which weighed the trucks in question. On enquiry as regards the registration number of the trucks, it was found by the Department that the registration numbers as disclosed in the challans as also in the Dharamkanta slips were not that of the trucks but were of various other vehicles which were incapable of carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived under the cover by the said invoice were made by them by cheque and the sales tax declaration forms were issued against those transactions. From this he concluded that the sales were genuine and the scrap in question was duly received by them under the cover of challans as also the gate passes which were duly endorsed by the scrap dealers in their favour. He also submitted that the Department has failed to brought on record evidence to the effect as to whom the scrap in question has been sold if the appellant No. 1 is not the actual receiver of the goods as covered by the said documents. The Department has also not put on record any evidence to show as to how the manufacturer has procured such a huge quantity of scrap, if the same is not under the cover of the said invoices. For his above submissions, he relies upon the Tribunal decision in the case of M/s. Arsh Castings P. Ltd. v. CCE reported in 1996 (81) E.L.T. 276 (Tribunal) = 1995 (10) RLT 638 (CEGAT) and submits that the ratio of the above judgment squarely applies to the instant case and should be followed. Lastly he submitted that the demand in question is squarely barred by limitation inasmuch as the show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the original transport authority. He also drew the attention of the Bench to the reasoning of the adjudicating authority that both the parties, that is, the suppliers as well as the receiver of the scrap in question, in their statements before the investigating officers have denied payment of freight charges to the transporters. This non-payment of the freight charges to the transporters strengthens the department case as no transport would ply his truck without payment for the job done. As regards the appellants contention that the payment was made by cheque and the transactions were covered by their sales tax declaration, he submits that it is a legal facade to give a colour of genuineness to the transactions which have otherwise not taken place. He also submits that the Department is not required to prove his case to a mathematical precision and is required to prove a case with the pre-ponderance of probabilities, as laid down by the Supreme Court in the well famous case of D. Bhoormal - 1983 (13) E.L.T. 1546 (S.C.), which is relevant for purposes of making out a case against the accused. He further submitted that having initially prove the registration numbers to be wrong by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statements of the manufacturers as also of the suppliers that both the parties have denied payment of freight charges to the transporters. Whereas the manufacturers have deposed that the material was received by them on FOB basis and as such the freight charges were borne by the suppliers, the suppliers have stated that freight charges were not paid by them but were paid by the manufacturers.The learned advocate appearing on behalf of the appellants have admitted the above position as regards the fact of non-payment of freight charges. I find that this fact is strong enough to tilt the weight of evidence in favour of the Department. No transporter would ply his truck without the consideration being paid for the same. As regards the appellants reliance in the case of M/s. Arsh Castings Pvt. Ltd., I find that the facts of the case are not similar to the facts of the instant case. The Modvat credit in that case was sought to be denied to the manufacturer on the ground that the same was availed by them on the basis of bogus gate passes. The said charges of bogus gate passes was based upon the statements of the suppliers who were not produced for cross- examination. In the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a result of those enquiries the transactions have been found to be fictitious. It is not in the ordinary course that based upon the material supplied by the manufacturer that the demand has been raised. When the very basis of the transactions have been doubted and have now been found to be fictitious, the invocation of the larger period of limitation was justified on the part of the Department. Accordingly, I hold that the demands are not barred by limitation. 6. As regards the personal penalty of Rs. 50,000/- on appellants No. 1, that is, M/s. R.K. Induction Industries P. Ltd. is concerned, in view of my findings above, the same is sustainable against the appellants. 7. As regards the penalties on the other four appellants, a quantum of Rs. 10,000/- has been imposed on each of them under Rule 173Q(1)(bbb). No doubt the order part of the impugned order mentions that the said Rule has to be read with Rule 209A, I find from the reasoning recorded in Paragraphs 17 of the impugned order that the adjudicating authority has justified imposition of penalty upon these four appellants under Rule 173Q(1)(bbb). The said part is reproduced below for better appreciation :- The contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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