TMI Blog2003 (10) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... nts 2 and 3. On carrying out checking of the factory premises of the company appellant No. 1 on 19-9-97, and after recording the statement of their DGM Accounts, Shri R. Shridharan, it was revealed to the officers of the Central Excise, that the company was not putting Sl. Nos. of the CPTs in the challans issued by them under Rule 57F(3)/(4) or on any other document/packing list which were sent by them back to appellants 2 and 3 for repairs. The officers also found that in fact, there was replacement of the defective CPTs sent by the company appellant No. 1 to appellants 2 and 3 for repairs and those replaced CPTs were not cleared on payment of duty by the appellants 2 and 3 and as such, no Modvat credit on the same could be legally availed by the company appellant No. 1. They also did not find any co-relation with the CPTs sent by the company appellant No. 1 for repairs and the CPTs thereafter received by them after the repair/replacement from appellants 2 and 3. The officers also conducted enquiry against appellants 2 and 3 and recorded statements of their officers and found that these appellants had in fact cleared new CPTs instead of carrying out any repair on the defective CPT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iterated the correctness of the impugned order and maintained that complete particulars especially the identification marks/Sl. Nos. of the CPTs were neither mentioned in 57F(3)/(4) challans issued by the company appellant No. 1 while sending the defective CPTs to appellants 2 and 3 nor by the latters, (appellants 2 and 3) while clearing the defective CPTs from their factory after doing the requisite repair work and as such they had failed to prove the co-relation between the CPTs sent for repair and the CPTs received after repair by the appellant No. 1. He has also contended that there was in fact an understanding between appellants 1 and 2 which was arrived at after the meeting of the representatives of both the companies under which appellant No. 2 undertook the replacement and not the repair of the defective CPTs as and when received from the company appellant No. 1 and this understanding is enough to substantiate the allegation as made out in the show cause notice against both the appellants for denial of the Modvat credit and imposition of the penalty. 7.We have heard both the sides. The denial of the Modvat credit to the company appellant No. 1 of the amount in dispute has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant No. 1. That order of the Collector was upheld by the Tribunal also and the same is reported in 2001 (135) E.L.T. 288 = 2000 (41) RLT 333. In the face of that order, it is legally not permissible to accept those very allegations against the appellant No. 2 of having not repaired the defective CPTs received from the company appellant No. 1, but replaced the same with new ones by clearing the same from the factory without payment of duty. 9.The learned JDR has no doubt laid much emphasis on the statement of Girish S. Shah, Manager Production of the appellant No. 1 recorded on 22-1-99 and the minutes of the meeting held on 8-5-98 between the representatives of both the companies (appellants 1 and 2) to contend that there was understanding that company appellant No. 2 would only to replace and not repair the defective CPTs as and when received from company appellant No. 1 and that the electrical defects and dents in the CPTs were even otherwise not repairable and as such there was no question of the repair of the same. But in our view his contention is wholly misconceived. Shri Girish S. Shah, Production Manager of the company appellant No. 1 has only stated that the electr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the defective CPTs from the customers. According to him on receipt of the defective CPTs, at the gate, the documents are checked, verified and thereafter the consignment of the defective CPTs is allowed inside the factory. In the factory after unloading the consignment the CPTs are physically checked by the Customer Service Department and the report prepared by that Department contains the details of the customers who had sent the CPTs, the gate pass and of the documents accompanying the CPTs, thereafter the defective CPTs are then examined to ascertain the nature of the defects by the Quality Control Department and after removing the defects the CPTs are sent back. He has also stated that the entries at every stage are made in the relevant registers right from the date of receipt of the CPTs till the return of the same after removing defects to the customers. There exists no cogent reasons to disbelieve his version, especially when there is no evidence to falsify the same and to show if any defect or irregularity was found in any of the records maintained by his company, at the time of checking. No duty demand has also been raised against his company appellant No. 3 on the gro ..... 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