- (1.) These are two appeals which have been filed by the revenue against one consolidated order dated 26-3-2007 passed by the Customs Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi arising out of Order-in-Appeal No. 91-94/C.E./Chd/2005 dated 10-3-2005 passed by the Commissioner (Appeals), Customs & Central Excise, Chandigarh whereby the Commissioner (Appeals) Customs & Central Excise set aside the penalties imposed upon the dealers/assessees by the adjudicating Authority. Since the issue involved in the appeals filed by the revenue is inter-related and arises from the same common order of the Tribunal, both the appeals are being disposed of by a common order for the sake of convenience.
(2.) The facts of the case, common in both the appeals, are that the respondents are registered dealers with the revenue-Department and they are receiving duty paid raw material which is being supplied to various manufacturers. Undisputedly, the payments for the purchase of the inputs have been made by the respondents through cheque/demand draft. It is also not disputed that the inputs in question have been used in the manufacture of final products, which have been cleared on payment of duty. The respondents are availing Cenvat/Modvat credit under the provisions of the Act.
(3.) On an information received to the effect that the respondents are showing use of fictitious vehicles for transportation of raw material for fraudulently passing of Modvat/Cenvat credit, the Preventive Staff of the Central Excise Division, Mandi Gobindgarh visited the premises of the respondents. After verification, it was found that in respect of a large number of invoices/transactions, sales of raw material shown by the respondents were transported on vehicles bearing registration Nos. of scooters, motor-cycles, mopeds, combines, jeeps, sprinklers, tractors etc. (hereinafter referred to as "improper vehicles") which were mostly LTVs or were otherwise incapable of transporting the huge quantities of Iron and Steel items mentioned in the concerned invoices and in some cases the vehicle numbers as mentioned on the invoices had not even been issued by the concerned Transport Authority indicating that material under these invoices/transactions had actually not been transported/ transferred and these transactions appeared to be mere fraudulent paper transactions to facilitate the buyers to avail of inadmissible Modvat/Cenvat credit.;