CEA Nos.14 to 19 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA Nos.14 to 19 of 2008 Date of decision: 4.7.2008 (CEA No.14 of 2008) Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus M/s Neepaz Steels Ltd., Shivam Chambers, Old Post Office Road, Mandi Gobindgarh (Pb.) ......Respondent (CEA No.15 of 2008) Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus Sh.Nirmal Kumar Aggarwal, Director, Adhunik Steels Ltd., Shivam Chambers, Old Post Office Road, Mandi Gobindgarh (Pb.) ......Respondent (CEA No.16 of 2008) Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus Sh.Rakesh Goyal, Prop. of M/s. Nav Rakesh Steel Corporation, Mandi Gobindgarh (Pb.) ......Respondent (CEA No.17 of 2008) Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus Sh.Sushanta Banerjee, Stock Yard Incharge of M/s Tata Iron & Steel Company Ltd., Amloh Road, Mandi Gobindgarh (Pb.) ......Respondent (CEA No.18 of 2008) Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus M/s Tata Iron& Steel Company Ltd., Amloh Road, Mandi Gobindgarh (Pb.) ......Respondent CEA Nos.14 to 19 of 2008 2 (CEA No.19 of 2008) Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus M/s Adhunik Steels Ltd., Shivam Chambers, Old Post Office Road, Mandi Gobindgarh (Pb.) ......Respondent CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Aman Chaudhary, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . 1. This is a bunch of six appeals which have been filed by the revenue against one consolidated order dated 5.3.2007 passed by the Customs Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi arising out of Order-in-Appeal No.21-25/CE/Chd/2005 dated 24.1.2005 passed by the Commissioner of Central Excise (Appeals), Chandigarh whereby the Commissioner of Central Excise (Appeals) set aside the penalties imposed upon the dealers/assessees by the adjudicating Authority. Since the issue involved in the appeals filed by the revenue is inter-related and arises from the same common order of the Tribunal, all the appeals are being disposed of by a common order for the sake of convenience. 2. The facts of the case, common in all the appeals, are that the respondents are registered dealers with the revenue-Department and they are receiving duty paid raw material which is being supplied to various manufactures. Undisputedly, the payments for the purchase of the inputs have been made by the respondents through cheque/demand draft. It is CEA Nos.14 to 19 of 2008 3 also not disputed that the inputs in question have been used in the manufacture of final products, which have been cleared on payment of duty. The respondents are availing Cenvat/Modvat Credit under the provisions of the Act. 3. On an information received to the effect that the respondents are showing use of fictitious vehicles for transportation of raw material for fraudulently passing of Modvat/Cenvat Credit, the Preventive Staff of the Central Excise Division, Mandi Gobindgarh visited the premises of the respondents. After verification, it was found that in respect of a large number of invoices/transactions, sales of raw material shown by the respondents were transported on vehicles bearing registration Nos. of scooters, motor-cycles, mopeds, combines, jeeps, sprinklers, tractors etc. (hereinafter referred to as “improper vehicles”) which were mostly LTVs or were otherwise incapable of transporting the huge quantities of Iron and Steel items mentioned in the concerned invoices and in some cases the vehicle numbers as mentioned on the invoices had not even been issued by the concerned Transport Authority indicating that material under these invoices/transactions had actually not been transported/ transferred and these transactions appeared to be mere fraudulent paper transactions to facilitate the buyers to avail inadmissible Modvat/Cenvat Credit. 4. The respondents appeared before the Adjudicating Authority in response to the show cause notices and submitted reply as under: (1) There is no evidence with the Department that the raw material has been directed to some other destination, instead of being transported to the manufacturer's factory/premises. (2) The payments were made through cheques/demand drafts. (3) Inputs in question have been used in the manufacture of final products which have been cleared on payment of duty. (4) The RT-12 returns have been assessed finally by the Range Officer, CEA Nos.14 to 19 of 2008 4 which contains all the documents including (the invoices under dispute) on the basis of which the Modvat Credit has been availed and utilised. (5) The respondents had not played any role in the wrong mentioning of wrong vehicle numbers and the Modvat Credit was passed rightly. The Adjudicating Authority vide its order dated 13.10.2004 held that the charges levelled in the show cause notice stands established against the respondents who in connivance with one another, defrauded the Government of its legitimate revenue and imposed the penalty oh the respondents. 5. Feeling aggrieved against the order of the Adjudicating Authority the respondents filed appeals before Commissioner (Appeals) who vide his order dated 24.1.2005 accepted the appeals and set aside the penalties against the respondentss. 6. Feeling aggrieved against the order of the Commissioner (Appeals), the Department further filed appeals before the Tribunal challenging the said order. The Tribunal vide impugned order dated 5.3.2007, dismissed the appeals filed by the revenue. The relevant part of the order of the Tribunal is reproduced: “I find that the Commissioner(Appeals) after going through the evidence on record, held as under:- 1. Payments for the purchase of the inputs have been made through Chequa & Demand Draft. 2. The inputs in question have been used in the manufacture of final products, which have been cleared on payment of duty. 3. The Department has not been able to prove that any other alternative raw material was received and used in the final products. 4. The RT-12 return have been assessed finally by the CEA Nos.14 to 19 of 2008 5 Range Officer, which contains all the documents including (the invoices under dispute) on the basis of which the Modvat Credit has been availed and utilized. The above findings which are based on evidence are not under challenge in the present appeals. These findings show that the inputs supplied were duly received by the manufacturers and the same were used in the goods manufactured which were cleared on payment of duty. There is no evidence on record in the present appeal to controvert the above findings. In these circumstances, I find no merit in the appeals and the same are dismissed.” Thus, the Tribunal held that the findings of the Commissioner (Appeals) are based on evidence and are not under challenge before the Tribunal. It was also observed by the Tribunal that these findings show that the inputs supplied were duly received by the manufacturer and the same were used in the goods manufactured which were cleared on payment of duty and there is no evidence on record to controvert the above findings. 7. Still not satisfied with the order of the Tribunal, the revenue has filed the instant appeals before this Court seeking to raise the following substantial question of law:- . . “Whether the Tribunal is correct in rejecting the investigation report which otherwise clearly indicates the wrong availment of Modvat/Cenvat Credit?” 8. We have heard Mr. Aman Chaudhary, learned counsel for the revenue-appellant. However, we find no force in the contentions raised by him. The Tribunal has recorded a finding of fact that the inputs supplied by CEA Nos.14 to 19 of 2008 6 the respondents were duly received by the manufacturers and the same were used in the goods manufactured, which were cleared on payment of duty. The Tribunal also found that the Department has not been able to prove that any other alternative raw material was received and used in the final products. The Tribunal also held that the findings of the Commissioner (Appeals) in favour of the respondents were not challenged by the Department Representative before the Tribunal. The Tribunal has also noted that the findings of the Commissioner clearly established that the RT-12 returns have been assessed finally by the Range Officer which contains all the documents including the invoices under dispute on the basis of which the Modvat Credit has been availed and utilised and that payments for the purchase of the inputs have been made through cheque/demand draft. 9. Thus, there is no merit in these appeals as no question of law, much less substantial, arises from the order of the Tribunal wherein pure findings of fact have been recorded in favour of the respondents. 10. Hence, the appeals are dismissed. (RAKESH KUMAR GARG) JUDGE July 4, 2008 (SATISH KUMAR MITTAL) ps JUDGE CEA Nos.14 to 19 of 2008 7 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.15 of 2008 Date of decision: 4.7.2008 Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus Sh.Nirmal Kumar Aggarwal, Director, Adhunik Steels Ltd., Shivam Chambers, Old Post Office Road, Mandi Gobindgarh (Pb.) ......respondents CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Aman Chaudhary, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . For orders, see CEA No.14 of 2008. (RAKESH KUMAR GARG) JUDGE July 4, 2008 (SATISH KUMAR MITTAL) ps JUDGE CEA Nos.14 to 19 of 2008 8 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.16 of 2008 Date of decision: 4.7.2008 Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus Sh.Rakesh Goyal, Prop. of M/s. Nav Rakesh Steel Corporation, Mandi Gobindgarh (Pb.) ......respondents CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Aman Chaudhary, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . For orders, see CEA No.14 of 2008. (RAKESH KUMAR GARG) JUDGE July 4, 2008 (SATISH KUMAR MITTAL) ps JUDGE CEA Nos.14 to 19 of 2008 9 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.17 of 2008 Date of decision: 4.7.2008 Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus Sh.Sushanta Banerjee, Stock Yard Incharge of M/s Tata Iron & Steel Company Ltd., Amloh Road, Mandi Gobindgarh (Pb.) ......respondents CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Aman Chaudhary, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . For orders, see CEA No.14 of 2008. (RAKESH KUMAR GARG) JUDGE July 4, 2008 (SATISH KUMAR MITTAL) ps JUDGE CEA Nos.14 to 19 of 2008 10 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.18 of 2008 Date of decision: 4.7.2008 Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus M/s Tata Iron& Steel Company Ltd., Amloh Road, Mandi Gobindgarh (Pb.) ......respondents CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Aman Chaudhary, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . For orders, see CEA No.14 of 2008. (RAKESH KUMAR GARG) JUDGE July 4, 2008 (SATISH KUMAR MITTAL) ps JUDGE CEA Nos.14 to 19 of 2008 11 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CEA No.19 of 2008 Date of decision: 4.7.2008 Commissioner of Central Excise Commissionerate, Chandigarh ......Appellant Versus M/s Adhunik Steels Ltd., Shivam Chambers, Old Post Office Road, Mandi Gobindgarh (Pb.) ......respondents CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Aman Chaudhary, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . For orders, see CEA No.14 of 2008. (RAKESH KUMAR GARG) JUDGE July 4, 2008 (SATISH KUMAR MITTAL) ps JUDGE CEA Nos.14 to 19 of 2008 12