COMMR. OF C. EX. Vs. SURINDRA STEEL TRADERS

JUDGEMENT

(1.) NO representation for the respondents in spite of notice. This case was adjourned on an earlier occasion at the instance of the respondents. This time, there is no request for any adjournment either. I have examined the records and heard ld. SDR. A party viz. M/s. Sandeep Steel and Agro Industries ("M/s. Sandeep", for short) had taken Modvat credit on a quantity of 33.020 MTs of their raw material on the basis of an invoice dated 26 -7 -2000 issued by M/s. Surindra Steel Traders (the present respondents). The credit was taken on 26 -7 -2000 itself. This fact was found out by officers of Central Excise who visited their factory on that date. The officers further noticed that the raw material covered by the invoice had not reached the factory and the Modvat credit had been taken without receipt of the input. This mistake was admitted by M/s. Sandeep who forthwith reversed the credit. Nevertheless, a show cause notice was issued to M/s. Sandeep as well as to the present respondents, proposing to impose on them penalties under Rule 173Q of the erstwhile Central Excise Rules, 1944. The original authority imposed penalties of Rs. 20,000/ - and Rs. 10,000/ - respectively on M/s. Sandeep and the respondents. The Commissioner (Appeals) took a lenient view and vacated the penalty imposed on the respondents. Hence, this appeal of the Revenue.

(2.) LD . SDR, submits that illegal availment of Modvat credit without receipt of inputs is a fact admitted by M/s. Sandeep, reversed the credit forthwith at the instance of the Department. It was as late as on 21 -9 -2000 only that the respondents stated that they had sold the aforesaid quantity of raw material under the aforesaid invoice dated 26 -7 -2000 to M/s. Sandeep.

(3.) THE proprietor of M/s. Sandeep, on the other hand, admitted that only the invoice was received by them and the goods were not received. In the circumstances, the respondents should be held to have issued modvatable in voice without supplying inputs to M/s. Sandeep and the penalty imposed on the former by the original authority should be restored. I am unable to accept this plea. When M/s. Sandeep stated that they had not received the inputs under cover of the relevant invoice and the respondents stated that they had, in fact, sold the goods under cover of invoice to M/s. Sandeep, it should have occurred to the Department that a statement of the transporter who trans ported the goods should be taken. On the other hand, what is found against the respondents is that the statement dated 21 -9 -2000 of Shri Pushkar Raj (proprietor), is an afterthought. The fact remains that it was only 21 -9 -2000 that the respondents were summoned by the Department. On that very day, Shri Pushkar Raj stated that they had sold the goods under cover of invoice to M/s. Sandeep. This statement has not been rebutted by anyone. In the circumstances, a penalty on the respondents under Rule 173Q is unwarranted.