TMI Blog2004 (5) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... availed of such credit and utilized the same for payment of Central Excise duty on the ingots manufactured by the appellant. In 1991 the appellant purchased a total quantity of about 9800 MTs of scrap and produced about 7100 MTs of ingots. Similarly, in 1991-92 there was a purchase of about 4100 Tonnes of scrap and production of 3350 tonnes of ingots. The figures for 1992-93 were about 4560 tonnes of scrap and about 1970 tonnes of ingots. At this juncture, it may be noted that part of the procurement of scrap was from two parties, namely M/s. Jayashri Steels and M/s. Jayashri Industries. The procurement from them was about 750 MT and 500 MT respectively for 1991, 600 875 MT respectively for 1991-92 and 413 270 MT respectively for 1992-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1998 for failure to comply with the requirement for making pre-deposit. Subsequently, the appellant filed restoration application seeking to restore the appeal upon deposit of the amount. The appellant also made the required deposit and produced TR challan from Punjab National Bank, Mohan Nagar dated 11-12-2002, and accordingly, we allowed restoration of the appeal and heard both sides. On the last date of hearing of the appeal on 13-11-2003, both sides desired to file written notes. The same was allowed and orders reserved. Both sides have subsequently filed written summaries, M/s. G.D. Steel (P) Ltd., filed their note on 27-11-2003. Further, written submissions were filed by M/s. G.D. Steel (P) Ltd., on 5-2-2004 and the SDR on 12-1-2004. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly is required to be made based on the facts ascertained in respect of each of the consignments of inputs received by them. It is being pointed out that such examination of evidence and recording of finding has not taken place and the revenue authorities have taken a view that findings against the inputs suppliers apply to the appellants and the others and for that reason alone the Modvat credit taken by the appellants is required to be returned. 6. The appellants have also submitted that evidence and findings themselves do not go against the appellant. It is being pointed out that one of the grounds against M/s. Jayashri Steels and M/s. Jayashri Industries is that they were having extremely high production of scrap - 68 % and 80% and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of accounts and has submitted that the summary showed that the relationship between the parties was entirely commercial, and it cannot be false book keeping, particularly when considerable sums are paid by a/c payee cheques and the banking transaction evidences payments. 8. The appellants have also emphasized that the Revenue s allegation remains entirely un-corroborated. It is being pointed out that there is no evidence whatsoever brought on record in support of the allegation that the appellant had, in fact, procured the scrap from any other source. Revenue has obtained no evidence regarding purchase, payment, transport or any other aspect of such purchases. The learned Counsel for the appellants emphasized that, in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand against the appellant is entirely sustainable inasmuch as it has been found that the appellants inputs suppliers were found to be not carrying out any manufacturing activities and the entire account kept by them about production, transport etc. were found to be false. He pointed out that the huge fraud committed by M/s. Jayashri Steels and M/s. Jayashri Industries remain established by large shortages of inputs, extremely high production of scrap, irregular production, claim about use of scooter, car, moped etc. for transport of scrap, discrepancy in salary and other registers and ledgers, the factory being shown as closed on Sunday while it was in production on Sunday etc. The learned SDR has emphasized that when the entire transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant to findings about the appellant s suppliers, that, in no way, vitiates the purchases made by the appellants from those parties. The appellants have also shown how unacceptable is the allegation that the appellants transaction with these two parties were mere book entries. The two parties in question were not the sole source of supply of scrap to the appellant. The appellants were also not paying for the scrap entirely by return supply of ingots. Part of the payment was made through cheques and those transactions are evidenced by the banking documents. Adjusting accounts periodically against the value of mutual supplies and making differential payments between parties is a common business practice. Such adjustments do not indicate or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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