- (1.) The facts of the case are that the respondent is registered with the Department and are engaged in the manufacture of C.R. Strips and are availing Modvat credit on the strength of inputs received from M/s. Majestic Industries Limited. It came to the knowledge of the Department that the respondent-assessee has fradulently availed Modvat credit to the tune of Rs. 2,17,821/- of invoices issued by M/s. Magestic Industries Limited without physically receiving the goods. On physical verification at the premises of the registered dealer, it was found that there were no stocks of goods against the recorded balance of 243 MT of HR/CR Coils/Sheets and 98 MT of steel scrap in RGT-23D register. The registered dealer explained that they had sold the material without issuing invoice and they were making transit sales of the goods in the absence of any godown. It was also found that the number of trucks used for receipt of the goods and dispatch of the same goods were different. The Transport Company which issued GRs was also found to be fictitious. A show cause notice was issued to the assessee for recovery of wrongly availed Modvat credit. The Adjudicating Authority vide Order-in- Original dated 13-9-2004 disallowed Modvat Credit of Rs. 2,17,821/- along with interest and imposed a penalty of Rs. 2,17,821/- each on the assessee and the Registered Dealer.
(2.) Aggrieved against the order dated 13-9-2004, the assessee filed an apepal before the Commissioner (Appeals) who vide order dated 15-12-2004 allowed the appeal of the assessee observing that the Adjudicating Authority has passed the order only on the ground that the vehicles used for transporting the inputs were not capable of transporting the goods in question and as such, it has been presumed that the Modvat credit has been taken without actual receipt of the inputs and that the said ground is not sufficient to deny the Modvat credit to the appellant by presuming that no inputs have been received by the appellant.
(3.) Feeling aggrieved against the order of the Commissioner (Appeals), the revenue further filed an appeal before the Tribunal challenging the said order which was dismissed by the Tribunal vide impugned order dated 7-12-2007 on the ground that the Commissioner (Appeals) after going through the evidence produced by the respondent regarding payment of price of inputs, their use in the manufacture of final products which were cleared on payment of duty allowed the benefit and these findings are not under challenge in the appeal. Further, the credit was availed in the year 1996 whereas the present investigation was made in the year 2000. The respondent was filing regularly the RT-12 returns along with necessary documents and, therefore, there is no infirmity in the order passed by the Commissioner (Appeals). The relevant part of the order of the Tribunal is reproduced herein below :- "In this case, the revenue denied the credit on the ground that the respondent had not received the inputs; however, credit was availed on the strength of duty paying documents. The statement of dealer is very clear on this issue which says that they were making transit sales in respect of goods received from their factory. It is also the objection of the revenue that the transporters were non-existent; therefore, there is no evidence that the respondent received the inputs. I find that the Commissioner (Appeals) after going through the evidence produced by the respondent regarding payment of price of inputs, their use in the manufacture of final product which were cleared on payment of duty, allowed the benefit. These findings are not under challenge in the present appeal. Further, the credit was availed in the year 1996 whereas present investigation was made in the year 2000. The respondents were filing regularly RT-12 returns along with necessary documents. In these circumstances, I find no infirmity in the impugned order, the appeal is dismissed.";