COMMISSIONER OF C. EX. Vs. AGGARWAL PLASTIC (INDIA)

JUDGEMENT

(1.) COMMON issue is involved in these appeals and, therefore, the same are taken up for hearing together for disposal.

(2.) THE relevant facts of the case, in brief, are that the respondent Nos. 2 and 3 are engaged in the manufacture of electric wire and cables, PVC components, strips at their factory and availed Cenvat credit. On 12 -3 -2003, the Central excise officers visited the factory of the respondent Nos. 2 and 3. The said visiting officers resumed invoices issued by M/s. Aggarwal Plastic (India), Delhi Respondent No. 1 on the ground that they had been issuing the fake sale invoices. The statements of the representative of the respondent Nos. 2 and 3 were recorded wherein they slated that they received inputs accompanied with duty paying documents of M/s. Aggarwal Plastic (India) Respondent No. 1 and utilized in the finished goods. Show cause notices dated 17 -7 -2003 were issued to the respondent Nos. 1 and 2. It has been alleged that Shri Rajiv Aggarwal, authorized signatory of respondent No. 1 in his statement dated 14 -2 -2003 stated that their firm was registered for the manufacture of PVC compound and there has been no production of PVC compound since 1 -1 -2002 and the invoices issued by them from 1 -1 -2002 were issued without any production which was done due to monetary constrains. It was proposed in the said show cause notice to disallow Cenvat credit of Rs. 1,34,784/ - availed by the respondent No. 2 along with imposition of penalty. It has also proposed to impose penalty under Rule 25(d) of the Central Excise Rules, 2001 and 2002 upon the respondent No. 1. Another show cause notice dated 26 -8 -2003 was issued to the respondent No. 3 on the similar ground proposing to disallow Cenvat credit of Rs. 4,63,968/ - availed by them on the basis of the documents issued by the respondent No. 1. The adjudicating authority by common Order -in -original dated 29 -1 -2004 dropped the proceedings against both the show cause notices. Revenue filed appeals against the respondent Nos. 2 and 3 which were dismissed vide Order -in -appeal dated 29 -12 -2004. Revenue also filed appeal against the respondent No. 1 which was dismissed vide Order -in -appeal dated 28 -1 -2005. Now, the Revenue filed common appeals against both the impugned orders.

(3.) THE learned DR on behalf of the Revenue submits that both the authorities below while passing the order have totally ignored the statement of Shri Rajiv Aggarwal who is an authorized signatory of M/s. Aggarwal Plastic (India), respondent No. 1. He submits that the respondent No. 1 supplier of inputs in their statement stated that buyer used to take Cenvat credit on fake invoices issued by the respondent No. 1 and the materials were procured by them from the open market. He also submits that Delhi Commissionerate issued show cause notice on 20 -5 -2004 to the respondent No. 1 for passing Cenvat credit on the basis of the invoices without physically manufacturing/supplying the excisable goods. Therefore, both the authorities below wrongly allowed the credit to the respondent Nos. 2 and 3 and failed to impose penalty on the respondents.