TMI Blog2008 (2) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... per]- These appeals by the Revenue are directed against the order of Commissioner (Appeals), Chandigarh dated 31.1.2006 upholding the order-in-original of the adjudicating authority dated 9.9.2004 and dismissing the appeal of the Revenue. 2. Brief facts of the case are that on 3.3.2003, a show cause notice was issued to the respondents, M/s. Hitkari Industries Ltd., in the matter of proposed reversal of the modvat credit. The case of the Revenue is that the respondents had availed modvat / cenvat credit amounting to Rs. 7,94,006/- fraudulently on the strength of invoices issued by Karan and Co. without actually receiving the goods. It may be mentioned here that notice was issued to Karan and Co. too as well as many others who had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act of fraud and the authorities below committed error in dropping the demand. It was submitted that in the absence of any evidence regarding the entry of goods in the State, invoices supposedly issued by Karan and Co. must be presumed to be fake and there was then no occasion for the respondents to claim credit on the basis of such invoices. It was submitted that in cases of clandestine transactions which take place under veil of secrecy, there cannot be direct evidence to prove such transactions and non-acceptance of the case of the Revenue on the ground that there was not enough evidence to substantiate the allegation was not correct. It was submitted that the Department having produced the records of the Excise and Taxation Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Karan and Co. stated that it had filed single ST XXVI-A form in respect of number of consignments and single entry was made in the ST XXVI-B register. The Department, however, did not check the consignment entered in the ST XXVI-A form and checked only ST XXVI-B register wherein single entry was made. 6. The Sales Tax Department vide its letter dated 20.5.2002 - on request of the Central Excise Department - submitted details of consignments by M/s. Karan and Co. which had crossed Parvanoo tax barrier. The list contained particulars viz. Serial Numbers, ST-XXVI-A Numbers, name of the Consignors, vehicle numbers, bill numbers and dates, amounts and GR numbers. The adjudicating authority found on examination of the records that ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as invoices, receipts of the inputs in the statutory records ( under the Central Excise law), clearance of the finished goods from the factory on payment of duty payment though account payee cheques to the consignor of inputs i.e. M/s. Karan Co. and realization / encashing of those cheques in their accounts, and thus affirmed the order of the adjudicating officer. 8. I find that the impugned order of the adjudicating authority is based on records and backed up by sound reasoning. It is true that in cases of clandestine transactions it would be futile to expect any direct evidence and therefore, it may be legitimate to draw inferences from the attending facts and circumstances. In such a case, therefore, the Department woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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