P.K. INTERNATIONAL Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellants are in appeals against the impugned order for demanding duty along with interest and penalties imposed on them. Brief facts of the case are that the appellants are manufacturer of ready -made garments and made up textile articles. The textile which is used to make the ready -made garments was duty free till 31 -3 -2003 and the same was made chargeable to excise duty from 1 -4 -2003. Therefore, as per Rule 9A of Cenvat Credit Rules, 2002, the transitional provisions for availment of Cenvat credit for textile article were introduced. The appellants filed declaration with the Central Excise department on 23 -5 -2003 and 3 -6 -2003 claiming one time deemed Cenvat credit of Rs. 41,48,337/ - showing that the appellants are having a stock of 11,15,825 LMts of grey and processed fabrics as on 31 -3 -2003 in terms of Notification 35/2003 -C.E., dated 10 -4 -2003. The said declaration was filed by the appellants in terms of Rule 9A(2) of the Cenvat Credit Rules, 2002 to avail deemed credit on the grey fabrics/processed fabrics lying in their factory as on 31 -3 -2003. The credit was taken in terms of Notification 35/2003, dated 10 -4 -2003. No investigation was conducted in respect of the stock of grey fabrics and the processed fabrics. As investigation took place with regard to supplies of fabrics wherein it was found that the appellant have claimed that they have received certain fabrics from M/s. Pinal Fabrics and M/s. Swastick Silk Mills but the suppliers stated that they have not supplied any fabrics to the appellants. With regard to the supplies of remaining fabrics, it was found that the suppliers were to be nonexistence. On that basis, a show cause notice was issued to the appellants for denial of deemed credit and imposition of penalties were also proposed. The adjudicating authority confirmed the demand along with interest and a penalty of Rs. 41,48,337/ - on the main appellant M/s. P.K. International and a penalty of Rs. 10,00,000/ - on Shri Sanjay Ajmera. Aggrieved by the said order the appellants are before me.

(2.) HEARD both sides.

(3.) ON the other hand, the learned AR submits that in this case the suppliers were found to be non -existence or they have stated that they have not supplied the fabrics to the appellants. Therefore, the proceedings have been rightly initiated against the appellants.