TMI Blog2002 (3) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... loy Cast Co., M/s. Metal Cast, M/s. Simplex Traders remain uncorroborated by any material evidence on record, whether it is correct to hold that aluminium ingots and zinc alloy ingots supplied by these suppliers on the strength of their invoices, are non-duty paid or having been cleared at Nil rate of duty and thereby disallowing the Modvat credit on deemed credit basis to the appellants in terms of Government Order F. No. 342/1/88-TRU, dated 1-6-89 and F. No. 342/1/88, dated 12-7-90. Where there exists no evidence with regard to the above named2. three suppliers having been engaged in the manufacturing activities towards aluminium ingot and zinc alloy ingots and the same also not been verified by the Deptt. during the course of investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of which deemed Modvat credit availed and such returns being assessed by the Range Superintendent under Rule 173-I should it not have been held that the appellants could not be charged with mis-declaration and suppression and the extended period of five years could not be invoked in the present case. Where the statement of Shri S.S. Aggarwal, partner of the7. firm confirms that he had no knowledge about the goods being exempted and where the evidence on record also does not suggest any such knowledge on the part of the appellants or Shri S.S. Aggarwal or any other partner and where the monthly RT-12 returns filed or also assessed under Rule 173-I, and where the investigating officer did not verify from Supdt. Range concerned w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the basis of which the deemed credit was being availed by the Applicant, were regularly being filed with the monthly RT-12 Returns which were duly assessed by the Range Superintendent under Rule 173-I of the Central Excise Rules,1944." 5.The basic facts which are necessary to dispose of the Reference are recapitulated as under :- On 4-1-1992 the Central Excise Staff, New Delhi paid a surprise visit to the factory premises of the petitioner company. During the course of scrutiny of records they discovered that the petitioner company is taking benefit of Modvat credit on aluminium alloy and zinc alloy ingots on the basis of invoices. Some of the invoices showed that the suppliers were not traders but manufacturers of the goods suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te pass when the goods are purchased from a factory and non-receipt/procurement of the gate pass shows that the goods were non-duty paid and the deemed Modvat was not admissible. Similarly, the case of supplies by M/s. Baldev Metals, the goods were clearly recognisable as non-duty paid. 8.The learned Collector, Central Excise, mentioned that it appeared that the petitioner company has availed inadmissible deemed Modvat credit during the period 6-5-1989 to 30-9-1991 and for the period 30-10-1991 to 24-1-1992. Learned Collector further mentioned in his order that to avail the Modvat credit the input had to be duty paid. It is further mentioned that the Modvat credit was admissible only in respect of duty paid aluminium/zinc alloy ingots and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort-levied or short-paid or erroneously refunded, a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company cannot be charged with misdeclaration and suppression and the extended period of five years could not be invoked in the present case. 12.We have heard learned Counsel for the parties at length. The petitioner company availed of Modvat credit on the goods supplied belonging to the category of exempted goods, or in other words, where no duty was paid. Obviously, the petitioner company could not avail the Modvat credit on such goods. No fault can be found in the respondents invoking Section 11A of the Act in the facts and circumstances of this case because the petitioner company suppressed the material facts from the department by misleading it inasmuch as the declaration filed under Rule 57G is with an intent to avail Modvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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