RISANSI INDUSTRIES LIMITED AND Vs. CCE

JUDGEMENT

(1.) THESE appeals are directed against the order of the Commissioner confirming the demand of Cenvat credit amounting to Rs. 56,90,146/ - wrongly availed and utilized in a fraudulent manner under Rule 12 of Cenvat Credit Rule, 2002 read with Rule 11(A) of the Central Excise Act and imposing a penalty of the like amount. The Managing Director has in his appeal challenged the penalty of Rs. 5 lacs imposed on him under Rule 26 of the Rules, 2002 read with Rule 209A of the Central Excise rules, 1944.

(2.) ACCORDING to the Revenue, the appellant company was engaged in the manufacture of pumps, hammers and knives and other excisable goods and was availing credit of Cenvat paid on inputs used in the manufacture of such goods. An intelligence was received to the effect that the applicant was fraudulently availing Cenvat credit without actually receiving the inputs in the factory and without using the same in the manufacture of goods which were manufactured by them. The applicant had by its letter dated 09.05.2002, requested the Deputy Commissioner for remission of duty on rubber waste and scrap said to have been generated during the manufacture of rubber parts. According to the applicant, they had accumulated about 40.00 MT of rubber waste and parings during the financial year 2001 -2002. It was due to restriction imposed by the Pollution Control Board, that the rubber scrap and waste could not be burnt as fuel and it was therefore not marketable. A request was, therefore, made in the letter for supervising the disposal of the waste. On finding that the quantity of rubber waste declared by the applicant as having been accumulated in a year was exceptionally high an enquiry was directed to be made. However, the applicant wrote another letter on 20.05.2002 to the Deputy Commissioner intimating that they had disposed of the entire quantity of 40 MT of rubber waste and that the applicant, therefore, withdrew their request contained in the letter dated 9.5.2002 [received on 13.5.2002, by the Deputy Commissioner]. On stock verification the officers detected a substantial difference in quantity of inputs lying in the factory vis -a -vis recorded in the statutory records. They found that spares for pumps in the factory were kept without their accountal. Statements were recorded of the employees/representatives of the applicant, and on the basis of the material on record, the adjudicating authority concluded that the applicant was engaged in deliberately misusing the Cenvat credit facility and evasion of duty. It was found that as per the record of the party, it had availed the Cenvat credit amounting to Rs. 56,52,081/ - during the period in question. As against that amount, it was held that the applicant had wrongly availed and utilized Cenvat credit of Rs. 56,67,044/ -. It was held that during the actual experiments/examination of manufacturing process and during investigation as well as at the time of tendering of statements by Shri Vipul Agarwal and his staff, it was never disclosed that during the material period the weigh scale installed in the rubber section was not in a working condition. It was held that such contention raised by the applicant was an after -thought. The Commissioner observed that even if for a moment it was assumed that the weigh scale installed in the rubber section was not properly working, inputs and output were weighed on the same scale and therefore, the ratio of input and output would have remained unchanged even if the scale was showing under weight or over weight. The Commissioner rejected the contention of the applicant that there were three "rollas" installed in the factory premises having capacity of 108 MT, 86 MT and 86 MT against the total capacity of 26 MT as alleged in the notice. On quantification of excess Cenvat credit availed on excess quantity of inputs, the Commissioner took into consideration the chart showing that during the material period they had availed Cenvat credit amounting to Rs. 44,94,862/ - on such inputs, but found that as per the record of the party, they had availed Cenvat credit amounting to Rs. 56,52,018/ -.

(3.) THE learned Counsel appearing for the applicant contended that the Commissioner had not taken into consideration the facts stated in paragraph 50 of the impugned order, that the applicant had reversed the credit amounting to Rs. 2,04,683.40 involved on 120.402 MT. This submission was found to be incorrect because the Commissioner has in terms considered this aspect in paragraph 77 of the impugned order and held that the applicant had not contested the demand of duty amounting to Rs. 2,04,683.40, which was liable to be confirmed. The learned Counsel further contended that the opinion of the expert Dr. G.N. Mathur was not taken into account. On being pointed out that the said opinion was clearly considered in paragraph 88 of the impugned order, the learned Counsel modified his submission by stating that it was not properly considered.