TMI Blog2004 (3) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-98, they seized 20 bales of acrylic staple fibres found in the factory and observed a shortage of 146519.5 kgs. of acrylic staple fibre; that the Commissioner has disallowed the Modvat Credit in respect of quantity of acrylic fibre found short on the basis that such material was never received in the factory; that this is not correct; that since there was no sufficient space available for storage of the material in the factory, the same was stored in their registered office and the raw material was brought in instalment to the factory, as and when required; that in fact subsequently the aforesaid quantity had been received in the factory and used in the manufacture of acrylic yarn. He, further, submitted that the shortage had been calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay working of the company. 3. Countering the arguments, Shri P.M. Rao, learned DR, submitted that Shri Sat Paul, Managing Director, had deposed, in his statement, dated 27-10-98, that they had received only bills for the quantity found short from M/s. Shiwalya Trading Corporation, their sister concern, without actually bringing/receiving the material in their premises; that even the visit of their Registered Office revealed shortage of acrylic fibre there also which was explained by Shri Sat Paul as having been received less from M/s. Shiwalya Trading Corporation. He, further, mentioned that the officers had also recovered six invoices of acrylic staple fibres issued by different suppliers that two invoices were issued by M/s. Indian Acry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said statement was retracted by the Managing Director. We, therefore, uphold the disallowance of Modvat Credit. We, however, found force in the submission of the learned Advocate that the demand of duty cannot be made from them on the ground that the inputs were used in the manufacture of finished goods which had been removed without payment of duty. If there is a shortage of inputs and the Modvat Credit has been disallowed, it cannot be claimed that the inputs found short were used in the manufacture of goods. We, therefore, set aside the demand of duty on this count. Acrylic staple fibre found in the factory without any bills and without entry in statutory records is liable to confiscation. We. however, reduce the amount of redemption fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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