9911796707
TMI Blog2007 (9) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods reportedly returned by M/s. TELCO and the investigation was in progress. (c) On 9-4-2003, the officers conducted physical verification of the finished products lying in the factory and the same did not tally with the daily account register, accordingly, seized the goods not accounted and valued at Rs. 40,91,769.86 involving central excise duty of Rs. 6,54,683/-. (d) The goods which have been dispatched to M/s. TELCO under 263 invoices relating to the period from February 2001 to January 2003 were shown to have been returned to the appellant-company after a delay of 2 to 3 months in each case. They have claimed that the goods have been returned by M/s. TELCO and they have received the same in terms of Rule 16 of the Central Excise Rules, though they prepared the credit notes for the goods returned they retained the credit notes in their factory. (e) M/s. TELCO have categorically stated that they have never received goods covered under the said 263 invoices; in the first place as they have not received the goods they have also not rejected. According to Senior Officer of M/s. TELCO, Thane - "I have also perused the credit notes issued by M/s. Gujarat Setco Clutch Ltd., Kal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 16. M/s. Telco has categorically denied to have received the consignment in the first place and also claimed that they have not rejected any of the consignments in question. M/s. Telco also has submitted that credit notes said to have been issued in their favour have not been received by them. The appellant-company has explained that they have prepared credit notes and these were not actually forwarded to M/s. Telco as the goods covered by these invoices were returned back to them under the cover of the same invoices. 8.1 Commissioner has clearly held that not even a single instance where the assessee has made payment for demurrage for abnormal stay of these consignments at Pune has been shown. 8.2 Commissioner has also held that the appellants are silent on the charges of non-payment of transport charges for the return transport of goods back to their factory. He has also held that the appellant have shown the goods as returned by fabricating documents though the same have not reached in their factory and cleared fresh goods clandestinely in the guise of re-despatch of returned goods. He has taken note of the fact that there was huge quantity of unaccounted goods valued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds with a view to take credit wrongly. Therefore, the findings of the Commissioner in this regard and denial of credit to the tune of Rs. 59,46,244/- and imposition of equal penalty under Section 11AC, demand of interest on the fraudulently taken credit are sustainable. However, as regards the penalty imposed on the Managing Director, as no direct or reliable evidence on his personal involvement in the manipulation of the records is found, the penalty imposed on him cannot be sustained, 10. In view of the above, the appeal filed by the appellant-company is rejected and the appeal by the Managing Director is allowed, (Pronounced in the open Court on . . .2-2007) Sd/- (M. Veeraiyan) Member (T) 11. [Per : Archana Wadhwa, Member (J)]. - As I do not find myself in agreement with the order proposed by my learned brother, Shri M. Veeraiyan, Member (Technical), I am recording a separate order. 12. First of all, I find that Commissioner vide his impugned order has also confiscated seized goods worth Rs. 40.91 lakhs approximately with an option to the appellant to redeem the same on payment of redemption fine of Rs. 10 lakhs. Order proposed by learned Member (Technical) is silent on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection by purchaser or due to the delivery not being accepted by the customers, such rejected goods are sent directly to production section of the company for carrying out necessary repair/repacking etc. 14. The adjudicating authority has held against the appellant on the ground that M/s. Telco's representative Shri Prosen it Sengupta, in his statement recorded on 30-10-2002 had deposed that no excisable goods (disputed in the present appeal) were received by them and as such not rejected. Further, same doubts have been expressed by him as regards payment made to the transporter for return journey of goods, the time gap between original clearance and return of the same, and the storage of the goods at Pune. Reference has been made to the transporter's statement recorded on 16-4-2003. It is seen that Sin Abdul Rehman, proprietor of M/s. Amin Transport & Trading Co., has deposed in his statement that whenever M/s. Telco, Pune has refused to take the delivery of the goods, on the ground that there was no schedule for the said goods, the same was being taken back from Pune to the appellant's factory at Kalol in the same truck. He has also clarified that the goods were always being unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve cannot be made basis for arriving at a finding that the goods were not received back, 15. In any case, I find that the Revenue's case is that goods were originally cleared but the same were not received back and credit has been availed on the basis of forged document. If that be so, the statement of Telco's representative that the goods were not received by them at all, goes against the Revenue's own stand. It is not clear from the case made out by Revenue as to whether they are doubling the first clearance of goods to Telco under the cover of Central Excise invoices or the doubt is about the receiving back of goods as returned goods or a subsequent clearance of the goods by utilization of the credit of the duty availed by the appellant in respect of the returned goods in terms of provisions under Rule 16. 16. Rule 16 of Central Excise Rules of 2001/2002, is to the following effect: "Rule 16. Credit of duty on goods brought to the factory. - (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason the assessee shall state the particulars of such receipt in his r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the open market. If that be so, the second route of return of the goods has to be accepted. 17. The denial of credit on the basis of the Central Excise Invoices originally raised on the ground that there is no explanation about the storage of the goods for a period of 2-3 months in between or there being no proof of payment of transportation charges to the transporter for return journey, in my view, are not sufficient ground for holding against the appellant. In any case, it has come on record that the appellant had produced LR for return of goods, cash vouchers for payment of transport charges. As such, the discrepancies pointed out by the Revenue which in any case stands explained by the appellant to major extent, cannot be made the basis for doubting the fact of return of the goods to the appellant's factory. As such, records and documents maintained by the appellant in the ordinary course of their business, cannot be doubted on the minor discrepancies, when there is no evidence for holding the same as manipulated or forged. 18. The adjudicating authority has further held that such Modvat credit wrongly availed by them was used for payment of duty by showing the redespat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in case of composite penalty, it cannot be made out as to which part is imposed under section 11AC and what amount is under rule 173Q. The Tribunal further observed that apportion of penalty cannot be done in appeal and accordingly set aside the personal penalty. Similarly, in case of Punjab Recorder Ltd. v. CCE, Chandigarh reported in 2001 (132) E.L.T. 41 (Tri-Del.), penalty was set aside on the ground that a composite penalty imposed under Rule 173Q and under Section 11AC cannot be apportioned." 20. For the same reason, I find no justification for imposition of penalty of Rs 5 lakhs on M/s. Gujarat Setco Clutch Ltd. under the Rule 25 of Central Excise Rules. 21. As regards confiscation of the goods, I find that the said goods were placed under seizure on 9-4-2003, on the ground that they were not entered in RG1 record. The appellant vide their letter dated 10-4-2003 canvassed as under: "THAT 250 Pressure Plates Assemblies of 352 mm and 1.75" splined. size, were in Polythene Bags only and were still required to be packed in Corrugated Boxes, with proper Lables; AND THAT 166 Pressure Plates Assemblies of 352 mm and 1.5' splined size, were in Corrugated Boxes but the said Box ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sd/- M. Veeraiyan Archana Wadhwa, Member (T) &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned SDR that appellant has in order to avail ineligible Cenvat credit has used the provisions of Rule 16 of Central Excise Rules, 2002 after taking me through the entire show cause notice and the statements recorded by the investigating authorities, he submitted that the appellant has not been able to conclusively bring on records, the failure to bring back the goods rejected at the gate of the warehouse of Telco immediately. It was his submission that even authorized representative of Telco has given a statement that when the finished goods which are rejected by Telco there is always a debit note in their records. It was also submitted that it was for the appellant to prove that they are eligible for the availment of credit under the Rule 16 of the Central Excise Rules, 2002 and that mere issuance of credit notes and keeping them in their own records is of no help as these goods never reached Telco. He submitted that the appellant has not co-related the finished goods returned to the finished goods dispatched by them. 30. In rejoinder the learned advocate submits that the Cenvat credit sought to be denied to the appellant in 263 invoices as annexed to show cause notice were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether the goods arc unloaded at the godowns of M/s. Gujarat Setco Clutch Co. Ltd., Pune. I state that, M/s. Gujarat Setco has no godown at Pune and therefore in certain cases i.e the Telco, Pune refuses to take the delivery of goods on the ground that there is no schedule for the said goods the same is being taken back from Pune to Kalol in the same truck." It can be seen from the above reproduced portion statement that the finished goods were returned back from the gate of the warehouse and the finished goods returned back in the same truck. This would mean that on being informed by Telco that finished goods are not accepted because there is no order or schedule the goods were sent back from the gate of the Telco's warehouse, in the same truck. It is also on record that the appellant did not have any depot or storage warehouse at or around the place, where the delivery was scheduled. It is also on record that the transporter also did not have any storage place for storing the finished goods that were not accepted by Telco. This all would indicate that either the finished goods should have been received back by the appellant in the same truck after allowance of reasonable ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he foregoing reasons, to my mind the order recorded by the Hon'ble Member (Technical) upholding the order of denial of Cenvat credit along with interest and equivalent penalty is correct. 34. Before answering difference of opinion question No. 2, I may take up the question No. 3 which is for the confiscation of the goods seized in the factory premises of the appellant, it seen that the Hon'ble Member (Technical), did not record any order on that ground. In any case it is on record and seen from the letter-dated 10-4-2003 that the appellant had explained the reasons for non-accountal of the goods in RG1. It is the claim of the appellant that the said goods were in the process of final packing and the same is not disputed by the Revenue. In the absence of any contrary evidence that these goods were not finished goods, I find that the confiscation of the goods is unwarranted and I agree with the order of the Hon'ble Member (Judicial) in setting aside the confiscation. 35. As regards the difference of opinion in question no. 2, I find that the Hon'ble Member (Judicial) is correct in setting aside the penalty imposed on the appellant under Rule 25(1) of the Central Excise Rules. Havin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
