TMI Blog2008 (7) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Respondent. [Oredr per: H.N. Devani, J. (Oral)]. - The appellant-assessee has proposed the following two questions: (a) Whether the Tribunal was right in holding that the Appellants failed to take reasonable steps of Rule 7(2) when admittedly the Appellants received goods from principal supplier on job work basis and principal supplier purchased goods from the said Vendor? (b) Whether Appellants are liable for amount of duty in a case where goods were purchased by the principle Supplier and not by the Appellants? 2. The facts in brief are that the appellant-assessee, at the relevant time, was engaged in manufacturing processed fabrics on job-work basis. During the course of its business, in June 2003, the appellant had un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant carried the matter in Appeal before the Commissioner (Appeals), Central Excise and Customs, Surat-1, who vide order dated 16.05.2005 confirmed the amount of duty but reduced the penalty to Rs.1,00,000/- under section 11AC of the Act read with Rule 13 of the Rules. The appellant carried the matter in further Appeal before the Customs, Excise Service Tax Appellate Tribunal (the Tribunal). The Tribunal vide the impugned order dated 08.11.2006 confirmed the amount of duty and set aside the penalty. The appellant thereafter moved an application for rectifying the aforesaid order passed by the Tribunal, which came to be rejected by the impugned order dated 25.05.2007. 5. Mr. Hardik Modh, learned Counsel for the appellant has dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch CENVAT credit has been taken, are goods on which the appropriate duty of excise as indicated in the documents accompanying the goods has been paid as envisaged under sub-rule (2) of Rule 7 of the Rules. 7. The Tribunal in its impugned order dated 01.12.2006 [2007 (219) E.L.T. 348 (Tribunal)] has recorded the following finding : "It is not in dispute that the credit has been taken on the basis of invoices issued by one M/s. Muskan Prints of Surat. M/s. Muskan Prints did not exist in the address given by them. There is a clear evidence of fraud on the part of M/s. Muskan Prints. Any fraud vitiates the transaction. The document cannot be held to be valid for the purpose of taking credit. The appellant is the manufacturer; the duty lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, but set aside the penalty. 8. In its impugned order made in the rectification application, the Tribunal has reproduced the aforesaid findings and thereafter observed as follows: "There are two major issues discussed in the above paragraph. One relates to eligibility of Cenvat credit on the basis of document vitiated by a fraud. The second issue relates to penal action on the appellant manufacturer. On the first issue, it has been held that the credit was not available. As regards the second issue, though the conduct of the appellant manufacturer was found to be suspicious but still the benefit of doubt was given holding that the appellant did not have knowledge or intention in wrongly availing the Cenvat credit. In the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mself about the identity and address of the manufacturer or supplier, as the case may be, issuing the documents specified in rule 7 evidencing the payment of excise duty or the additional duty of customs, as the case may be, either - (a) from his personal knowledge; or (b) on the strength of a certificate given by a person with whose handwriting or signature he is familiar; or (c) on the strength of a certificate issued to the manufacturer or the supplier, as the case may be, by the Superintendent of Central Excise within whose jurisdiction such manufacturer has his factory or the supplier has his place of business, and where the identity and address of the manufacturer or the supplier is satisfied on the strength of a certificate, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umerated under the Explanation to rule 7(2) of the Rules, viz. the appellant undoubtedly has not satisfied itself about the identity and address of the supplier either from its personal knowledge, or on the strength of a certificate given by a person whose handwriting or signature it is familiar with, or on the strength of the certificate issued to the supplier by the Superintendent of Central Excise as envisaged under the said provision. It is, therefore, not possible to state that the appellant has fulfilled the requirements of sub-rule (2) of Rule 7 of the Rules. 13. In the aforesaid set of facts and circumstances, it cannot be said that there is any infirmity in the impugned orders of the Tribunal so as to give rise to any question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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