A.C. EXPORTS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE brief facts of the case are that one M/s A.C. Exports a proprietary concern of Shri Anil Chandak who his taken Central Excise Registration for manufacture of lay flat tubing and carry bags have purchased 1468.470 MTs of raw materials i.e. HDPE/PP Granules from M/s Haldia Petrochemicals Ltd., Calcutta during the period 01.04.2003 to 08.07.2003 and availed Cenvat credit of duty paid on such granules procured from M/s Haldia Petrochemicals Ltd., Calcutta and thereafter shown to have sent to various job workers to get lay flat tubing manufactured by them. Out of above quantity 1168.00 MTs of finished goods i.e. lay flat tubing in rolls was sold to M/s Hari Vishnu Packaging Ltd., Nagpur and 78.470 MTs of finished goods i.e. lay flat tubing in rolls was sold to various other parties on payment of duty, 190 MT of HDPE/PP Granules were sold as such by them to M/s Sunil Plastics, Thane on payment of duty and 32 MTs. Of waste was also sold on payment of duty.

(2.) IN respect of 1168 MTs of finished goods i.e. lay flat tubing got manufactured from job worker and sold to M/s Hari Vishnu Packaging Ltd. it was found that they have fraudulently availed of Cenvat credit amounting to Rs. 27,14,880/ - on 480 MT of HDPE/PP granules as the same was found to have been supplied to non existent job workers and received from them under job work challan. Enquiries at the end of job workers and the transporter who transported the raw materials and the finished goods revealed that the most of the job worker's unit were not in existence and no material was supplied to them and only a paper transaction was undertaken and consequently 447.410 MT of finished lay flat tubing said to have been manufactured from 480 MT of HDPE/PP granules and supplied to M/s Hari Vishnu Packaging Ltd. was never manufactured or received by M/s HVPL.

(3.) SIMULTANEOUS search was carried out at the premises of M/s HVPL and scrutiny of the records reveals that M/s HVPL have received 1168 MT of lay flat tubing and shown to have carried out the process of cutting and printing of such product without availing the Cenvat credit of duty paid on goods. These tubings were later on cleared to one M/s Abhirup under ARE -3A certificate on the basis of pre -authenticated CT -3 certificate under the provision of Notification 23/2003 dated 31.03.2003. M/s Abhirup is a 100% E.O.U. and as a result of search carried out at their premises, it was discovered that out of 1168 MTs of lay flat tubing said to have been received by them from M/s HVPL, 708 MTs of lay flat tubing after being cut to specific sizes was cleared by them to one M/s ATCOM Technologies, a DTA unit against payments to be made by them from the exchange earners foreign currency account. Statement of Directors of M/s ATCOM were recorded in which they stated that they did not have any commercial relationship whatsoever with M/s Abhirup Export Ltd. and that they have never purchased the goods viz. HDPE/PP lay flat tubing/cut length from M/s Abhirup Exports and the question of taking delivery of the goods does not arise as they do not have any godown at the address shown by M/s Abhirup. They further stated that no remittance or payments were made by M/s ATCOM to M/s Abhirup Export Pvt. Ltd. as no supply whatsoever was received by them. Statement recorded from the transporter also revealed that he has prepared lorry receipts as per directions received from M/s A.C. Exports, M/s HVPL and Abhirup export, but no goods have been transported from these premises in respect of above transactions. In view of the above it was concluded that M/s Abhirup has diverted 708 MTs of lay flat tubing to the domestic market without payment of duty and the balance 460 MT was never received by them as it was neither manufactured by M/s A.C. Export on job work basis and therefore the receipt of it by M/s HVPL and M/s Abhirup does not arise and that M/s Abhirup had made false entries in its warehouse register showing the receipt of 1168 Mts. of lay flat tubing for which they M/s Abhirup itself the re -warehousing certificate.