TMI Blog2008 (6) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri K.I. Vyas, Advocate, for the Appellant. Dr. M.K. Rajak, SDR, for the Respondent. [Order]. - M/s. Chintan processors Pvt. Ltd. are engaged in the manufacture of MM fabrics. They have filed appeals against the order demanding duty of Rs. 2,45,700/- + interest with equal amount of penalty on the company and the director. 2. The facts are briefly reproduced before proceeding further. (a) The appellants received grey fabrics from traders M/s. Karishma Overseas, who bought grey fabrics from the manufacturer M/s. Dhanlaxmi Textiles, who are registered with Central Excise Department and the registration No. is 370105/M/48/2003. The purchaser M/s. Karishma Overseas endorsed the invoice covering the goods in full in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid and the rule-7 also specifically provides that the reasonable steps can be the personal knowledge or the certificate given by a person with whom they are familiar or the Superintendent's certificate etc. They knew M/s. Karishma Overseas who supplied the fabrics very well and in view of the fact that the goods were totally endorsed by M/s. Karishma Overseas on the invoice and sent to them, they had fulfilled the requirements under the explanation of Rule 7(2) and therefore the credit had been taken correctly. He also stated that all these points were mentioned before the Adjudicating Authority but were totally ignored. However, the ld. Advocate also stated that the SCN is time-barred in view of the fact that RT12 returns filed for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since when fraud is involved in DEEC licence delay is condonable. 2. Golden Tools International v. Jt. DGFT, Ludhiana [2006 (199) E.L.T. 213 (P H)]. It was held that ultimate beneficiaries of DEPB scrips can not lay they are innocent irrespective of who furnished forged documents. 3. CC, Amritsar v. ATM International [2008 (222) E.L.T. 194 (P H)] 4.2 Dr. Rajak also relies on the decision of this Tribunal in support of his contention that reasonable steps have to be taken in respect of the manufacturer, who have supplied the goods and he states that in both judgments cited by him viz, in the case of M/s. Sheela Dyeing Printing Mills Pvt. Ltd. (Final Order No. A/431/WZB/Ah'bad/06 dated 1-12-2006) [2007 (219) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is immaterial as the credit was available for stock of fabric held by them as on 31-3-2002." In that case, on verification it was found that Muskan Prints did not exist in the address given by them. It was clearly held that as a manufacturer who has taken the credit, the manufacturer is required to know the supplier of raw materials and not merely their merchant manufacturer. Analogy of purchaser of stolen goods who cannot claim ownership even if he purchased without knowledge was given and it was concluded that the credit taken by the appellant was irregular and orders of the lower authorities were upheld. I also find that the cases quoted by the DR above are relevant. As argued by the ld. DR and also observed by the Tribunal above, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the fabrics were really transported and whether they were processed by the appellants have not been verified and but what is very relevant is the fact that the supplier was non-existent has not been contested. Once the supplier is proved non-existent, it has to be held that the goods have not been received. Therefore at that point of time when the invoice was received, only appellant could have been aware that the supplier was non-existent in addition to the merchant manufacturer. However, the appellants' claim that they have received the goods but how they have received from a non-existent supplier is not known. In any case, the credit cannot be taken on the basis of a document supplied by a non-existent supplier which has been prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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