TMI Blog2001 (9) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... rise to these appeals may briefly be stated as under :- The appellants were engaged in the manufacture of galvanized tapper steel tubes (Hamilton Poles/tapper tubes) classifiable under sub-heading 7308.90 of the CETA. They had been availing Modvat credit under Rule 57A of the Central Excise Rules on CR/HR sheets/coils and zinc which were used by them as inputs in the manufacture of their final products i.e. galvanized tapes steel tubes and those tubes were supplied by them to the Department of Telecommunication (in short DOT). On receipt of report of Intelligence, that they were fraudulently availing excess Modvat credit on these inputs by showing the excess consumption over and above the quantity actually consumed in the manufacture of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss amount of Modvat credit availed by them fraudulently, illegally on the inputs and for imposition of penalty on them. They contested the correctness of the show cause notices and denied of having misused Modvat credit scheme by claiming excess Modvat credit on the inputs used by them in the manufacture of their final products. 3. The Commissioner however, did not accept the version of the appellants. He through impugned order, affirmed demand of Rs. 7,76,668/- on the appellant No. (1) and imposed penalty of Rs. 7.80 lakhs on them. Similarly, the Commissioner confirmed demand of Rs. 6,22,190/- and imposed penalty of Rs. 6.25 lakhs on appellant No. 2. On appellant No. 3, the Commissioner confirmed the demand of Rs. 10,48,590/- and imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l on the record to substantiate this ground. According to him, as mentioned in para 22 of the impugned order, that as per DOT s specifications, the CR/HR coils sheets thickness was to be 2 mm for the manufacture of Type A4, A8, B8 Poles and of 2.5 mm for C8 type Poles with 10% tolerence, whereas the sheets procured by them from the dealers/traders/ manufacturers were of not that much thickness and as such there was irregular availment of Modvat credit by them. But there is no material on record to suggest if at the time of checking of the factory premises of the appellants sheets coils/strips of less than 2 mm/2.5 mm thickness which they were required to use in the manufacture of the poles/tubes supplied by them to the DOT, were found lying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to the DOT, in the open market and used sub-standard inputs of lesser thickness. The fact that some of the dealers obtained the coils sheet of thickness of less than 2/2.5 mm from the manufacturers or suppliers, also could not form the basis for opining that the appellants never purchased the inputs of 2/2.5 mm for using the same in the manufacture of final products. In most of their invoices, the thickness of the coils CR/HR coil/sheets was no doubt not mentioned, but from this omission no inference could be drawn to doubt the plea of the appellants that the coils/sheets used by them were of the specifications given to them by the DOT, especially when there was no complaint from the side of the DOT regarding use of sub-standard inputs, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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