TMI Blog2004 (8) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... Nasik etc. Such a verification revealed that the vehicle numbers listed in annexure "A" to the show cause notice were found to be of Motor Cycles, Delivery Vans, Tanker, Auto Rickshaw, Bus, Dumper etc. It is alleged that the appellant company has not received the inputs in to the factory as such inputs could not have been transported in the above type of vehicles. The officers recorded the statements of all the suppliers of the scrap and all of them have invariably stated that they sold the ship-breaking scrap to M/s. VAL on verbal orders, they have received the remuneration from the buyer, the vehicles on which the scrap was loaded were provided by the purchaser himself and that they are not in a position to explain as to why the vehicles on which the scrap is supposed to have been loaded turned out to be Tankers, Lorries, Auto Rickshaw, Delivery Vans, etc. 2.The Department also recorded the statements of owner of vehicle No. MH04S5516 who inter alia stated that he had never loaded any material from Darukhana and had never transported any material to M/s. VAL. Similarly the statement of owner/driver of vehicle No. MH04S2896 was recorded and the said person inter alia stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible for irregularities committed by transport owners; that in at least two cases it turned out that at least in his cases the vehicles shown as tankers in RTO records were actually converted into goods transport vehicles much before 1996 that the department failed to establish as to what happened to the scrap purchased if it was not received in the appellants factory; that it is settled position in law; that for demanding any duty and for imposing any penalty, the charges levelled should be substantiated with unimpeachable evidence; that the extended period has been invoked for dis-allowing the credit taken by alleging suppression of facts whereas the appellant at every point of time declared credit taken and utilised; that the jurisdiction to invoke the extended period of limitation is only with the Commissioner of Central Excise whereas the show cause notice was issued by the Additional Director General of DGCEI and therefore is invalid that there is no ground for imposing any penalty on M/s. VAL under Rule 57-I(4) or Rule 57AH read with Section 11AC of the Act; that there is no ground for imposing any penalty on the Chairman-cum-Managing Director that the adjudicating officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to even produce the gate registers which would indicate the receipt of goods into their factory or the bills/vouchers indicating the payment of transport charges on the specious plea that they were all destroyed in fire. The appellant therefore failed to establish that the inputs were received in the factory. Modvat credit taken on inputs, which were not received, was rightly denied by the Commissioner. He argued penalty under Section 11AC on the company interest under Section 11AB, penalty under Rule 209A on the Chairman-cum-Managing Director and on the supplier are imposable. 9.We have gone through the rival contentions and perused extensive case law filed by the ld. Advocate for M/s. VAL. Before we proceed to examine the various contentions we may set out certain facts which have not been controverted by either party. The ship-breaking scrap was purchased by M/s. VAL. The appellants produced S.S. Bars and Billets and cleared them on payment of duty. The department did lead any evidence to suggest that scrap other than the ship-breaking scrap was procured by the appellant to manufacture the final product. The suppliers of scrap in their statements clearly stated that the vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision applies in the present case. Similarly the decision in the case of Swastik Tin Works v. CCE, Kanpur [1986 (25) E.L.T. 798 (T)] also does not lay down any ratio which supports the appellant's case. We observe that the department raised a presumption against the appellants by establishing that the inputs could not have been received in the factory in vehicles mentioned in the invoices. This allegation itself is based on the reports by RTOs, who certified that the registration numbers belonged to vehicles other than goods transport vehicles with 10 tons capacity. It is for the appellants thereupon establish that indeed such vehicles as mentioned in the invoice did bring the input to their factory. They have failed to do so. Their gate register was burnt in some fire accident and the bills/vouchers indicating payment of cash to the drivers/owners of the trucks were also, destroyed in fire. One could understand that bills/vouchers, getting destroyed in fire or lost. But one cannot understand as to what has happened to the ledgers and registers to which the transactions done in cash are ultimately transferred. It is not the appellant's case that even such ledger and registers we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period can be invoked for denying Modvat credit. The ld. Advocate contended that Section 11AC is not invokable when Modvat credit is dis-allowed. We observe that recovery of credit wrongly availed of or utilised in an irregular manner is provided under Rule 57-I. The Commissioner invoked Rule 57-I(4) and Rule 57AH(2) of the Central Excise Rules read with Section 11 AC for imposing a penalty of equal amount of credit dis-allowed. We see no infirmity in this regard. 14.In so far as interest under Section 11AB goes, we observe that interest is chargeable as per provisions of that Section. In regard to the penalty imposed on the Chairman-cum-Managing Director, we observe that he was involved in day-to-day affairs of the company. His statements on different dates also reveal that he was conversant with the issues involved. A penalty under Rule 209A of Central Excise Rules can be imposed on an employee of the firm he was knowingly concerned with evasion of duty. 15.In so far as suppliers of the inputs are concerned, we observe that the responsibility of supplying goods to the consignee whose address is given on the invoices is cast on them. By mentioning vehicle numbers which do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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