COMMISSIONER, CENTRAL EXCISE AND CUSTOMS Vs. INDIA CONTAINERS LTD
HIGH COURT OF BOMBAY
COMMISSIONER, CENTRAL EXCISE AND CUSTOMS
India Containers Ltd
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Sangitrao S. Patil, J. -
(1.) The legality and correctness of the order dated 28.02.2003 in Appeal Nos.E/1369, 1370, 1371 and 1372 of 2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Region, Bench at Mumbai ("the Tribunal", for short) has been challenged by this Writ Petition to the extent it quashed and set aside the order, by which the petitioner, i.e. the Commissioner, Central Excise and Customs, Aurangabad, disallowed MODVAT credit for Rs.23,87,575/- obtained by respondent no.1, imposed penalty of Rs.50,00,000/- on respondent no.1 and further imposed penalty of Rs.5,00,000/- Rs.1,00,000/- and Rs.50,000/- against respondent nos.2, 3 and 4, respectively.
(2.) Respondent no.1 is a company holding Central Excise registration certificate for the manufacture of "oval tin cans for Colgate Tooth Powder" falling under Chapter 73, sub-heading no. 7310.00 of Central Excise Tariff Act, 1985 ("CETA", for short). Respondent no.2 is the Director, respondent no.3 is the Manager (Commercial and HRD) and respondent no.4 is the Plant Manager of respondent no.1.
(3.) The required thickness of tin plates for manufacturing oval tin cans ranges between 0.14 mm. and 0.24 mm. Respondent no.1 was getting the said tin cans painted from M/s.Divecha Glass Company being a job worker of respondent no.1. It was noticed that the tin plates were directly delivered at the job worker's end i.e. M/s.Divecha Glass Company for printing. The printed tin plates received from M/s.Divecha Glass Company were inspected to check their thickness, width and print quality whereon, it was noticed that the printed tin plates were of the thickness ranging between 0.18 mm. and 0.26 mm. (inclusive of thickness of print i.e. 0.02 mm.). The tin plates having thickness over 0.26 mm. were not found to have been used for manufacturing oval tin cans. However, it was noticed that during the period 1993-94 to 1997-98, respondent no.1 received MODVAT credit on the tin plates having thickness above 0.26 mm., which, in fact, was not used for manufacturing oval tin cans. It was, therefore, alleged that respondent no.1 availed of MODVAT credit on the tin plates of having thickness more than 0.26 mm. and replaced them by tin plates of lower thickness purchased from local traders. Respondent no.1 Company availed of irregular MODVAT credit of Rs.69,66,185/- during the period from 1993-94 to 1997-98. It was alleged that the modus-operandi of respondent nos.1 to 4 and their employees was to import the tin plates of thickness of more than 0.24 mm., to send them directly to the job worker for printing, to replace them at job worker's end and to receive back the printed tin plates of lesser thickness than 0.26 mm.;
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