TMI Blog2005 (7) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... ilment of Modvat credit on inputs used in the manufacture of AL Slugs Containers falling under Chapter 76 of the Schedule to CETA. In the impugned order the Commissioner ordered recovery of Rs. 23,97,432/- availed in respect of 1,34,253 Kgs of Al Sheets/coils used by the appellant firm; imposed a penalty of Rs. 5 lakhs on the firm (M/s. National Torch Tubes) under Rule 173Q Rule 9(2); imposed a penalty of Rs. 2,50,000/- on one Mr. S.G. Lakhoti the Power of Attorney holder of the firm and under Rule 209A, Rs. 1 lakh on Mr. A.K. Jain a dealer who issued modvatable documents; Rs. 2 lakhs on Mr. F. B. Mehta a dealer; Rs. 1 lakh on Mr. Umedmal Bharati another dealer all under Rule 209A. Hence these appeals. 2. Briefly the facts are that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch receipts is deniable. 3. Investigation conducted by the officers also seemed to have revealed that the inputs were not transported to the appellants premises. The Commissioner denied in all credit of Rs. 23.97,432/-. A part of this amount i.e. Rs. 4,43,438/- was denied not on the ground that the inputs covered under the gate passes were not useful to the appellant company, but on the ground that the invoices carried by the endorsed gate passes do not indicate that any Octroi was paid. The Commissioner holds that since there was no indication that Octroi was paid on the goods in question, they were never transported to the appellants premises. And what was not received in the appellants premises could not have been used in the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than 2.5 mm thickness. There is no serious contest to this fact. The debit notes raised by BALCO (the original supplier of the sheets/coils) against the dealers clearly indicate that BALCO has been supplying sheets of less than 2.5 mm thickness except in a few cases. Denial of credit taken on the duty paid on inputs which were not used in the manufacture of final products is in accordance of the provisions of Rule 57A of Central Excise Rules. 6. Having observed so, we note that credit of duty paid on the inputs covered under the above said endorsed gate passes, was denied on the ground that no Octroi was paid while the goods were transported. The conclusion drawn was that the inputs covered under those endorsed gate passes were never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on Mr. S.G. Lakhoti, the Power of Attorney holder for his acts of omission and commitment. Evidence clearly brings out that he was aware of the fact that the inputs received under several gate passes (enclosed) were not used in the manufacture of the final products but credit of duty was taken all the same. Penalty under Rule 209A was imposable. We however reduce the penalty to Rs. 50,000/- (Rupees Fifty thousand only) having regard to the facts and circumstances. 10. Penalties were imposed on the dealers who supplied the inputs. No collusion between them and the input user is brought out. The fact that the manufacture was misusing the Modvat scheme cannot bring out collusion with the dealers. This part has to be separately established ..... X X X X Extracts X X X X X X X X Extracts X X X X
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