Custom, Excise & Service Tax Tribunal
Mahindra Ugine Steel Co. Ltd vs Commissioner Of Central Excise, Raigad on 6 July, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL Nos. E/185/11, 1868, 1989, 2084, 2085/10-Mum (Arising out of Order-in-Original No. 07/CSP(07)COMMR/RGD/10-11 dated 18.8.2010 passed by Commissioner of Central Excise, Raigad) For approval and signature: Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
======================================================
1. Mahindra Ugine Steel Co. Ltd. Appellant
2. S.V. Sirsikar
3. Meegora Steels Pvt. Ltd.
4. Al-Karim Scrap Traders Pvt. Ltd.
5. Lachhmidhar Kanshiram Vs. Commissioner of Central Excise, Raigad Respondent Appearance:
Shri Gajendra Jain, Advocate, for appellants 1 & 2 Shri R.V. Shetty, Advocate, for appellant 3 Shri V.S. Sejpal, Advocate, for appellant 4 Shri V. Rrama Rao, Advocate, for appellant 5 Shri V.K. Singh, Special Counsel, for respondent CORAM:
Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial) Dates of Hearing: 13 & 14.5.2015 Date of Decision: 6.7.2015 ORDER NO Per: P.K. Jain Brief facts of the case are that the appellant No.1 has availed the credit of duty on iron and steel scrap obtained from breaking of ship and purportedly procured by them from a registered first stage dealer, M/s. Simandhar Steel Movers (India) Pvt. Ltd. (SSMIPL), Mulund, Mumbai. The case of the Revenue is that the iron and steel scrap obtained from breaking of ship covered by the invoices of SSMIPL were not received by the appellant No.1 but some other scrap was received and since the scrap covered by the duty paying invoices were not received, the appellant is not eligible to take credit of the same. The credit availed is incorrect and is to be recovered, in addition to the interest and penalties. Notices to appellant No.2 who was the then Sr. Vice President of the appellants unit, appellant No. 3, 4 & 5 who are the dealers in the iron and steel scrap from whom the appellant No.1 has placed orders to procure the said scrap and are not registered with the Excise department, are issued for imposition of penalty. The case was investigated on the basis of an information and perhaps as a consequence to another investigation undertaken against SSMIPL by the other jurisdictional Commissionerate.
2. Investigation by the jurisdictional Commissionerate of SSMIPL revealed that the said dealer has availed cenvat credit on central excise invoices by various ship breakers which included M/s. Ajay Alloys Casting Pvt. Ltd., Alang, M/s. R.K. Steel & Alloys, Pipavav and M/s. Baldev Ship Breakers Ltd., Alang. On enquiries made with the jurisdictional Superintendent in charge of the said ship breaking unit revealed that these ship breakers were not in existence during the period when the invoices were shown to have been issued by them to SSMIPL. This indicated that the central excise invoices issued by these ship breakers on which SSMIPL took the credit were bogus and fake with no corresponding manufacture, clearance or physical movement of goods or without the actual payment of central excise duty. A visit to the godown of SSMIPL by the jurisdictional officer revealed that as against the book balance of duty paid goods of 1350 MT, the physical stock available was only 9 MT. The said discrepancy was taken to mean that the dealer has not received any scrap from the ship breakers and was only engaged in paper transaction to avail and further pass on the fraudulent cenvat credit. Jurisdictional officer of SSMIPL also made enquires with the sales tax check post and RTO check post at Bhavnagar (Gujarat) where the vehicles are checked and assessed by the sales tax authorities of Gujarat to ensure that CST is properly paid. Enquiries revealed that they maintained the particulars of all vehicles passing through the said check post in electronic form on the computer. A scrutiny of the computerized print data indicated that for the period 1.4.2003 to 31.12.2003, no consignment of iron and steel scrap obtained from ship breaking from any of the Alang/Bhavnagar ship breakers had, however, crossed the border into Maharashtra. The said sales tax authority at Bhilad vide their letters dated 12.2.2004, 24.5.2004 and 12.1.2005, informed that not a single transaction of vehicle movement and sales tax payment was recorded in any check post of Gujarat showing movement of iron and steel scrap consigned to SSMIPL, Mumbai during the entire period from 2000-01 to 2003-04. Enquiries were also made with about 15 other ship breakers who have purported to have sold the ship breaking scrap to SSMIPL. Enquiries revealed that they have sold the plates obtained from breaking of the ships and such plates are normally used for rerolling or for manufacture of the structural items and such plates are not used for melting purposes. It was also revealed that such plates fetch far higher value compared to the melting scrap. Further, all such plates were sold under Form 45A which implies that these have not gone out of the State and are sold by the dealer within the same State. If the goods were to move out of the State, then the same would move under C-Form. Enquiries were also made with Regional Transport officers regarding the vehicle numbers mentioned in various invoices. It was revealed that some of the vehicle numbers mentioned in the invoices were that of tankers, motor cycles, tourist cars, delivery vans etc. which are not capable of consigning MS scrap. Further investigations were made with some of the vehicle owners. These vehicle owners in their statements confirmed that their vehicles were not used for transportation of iron and steel scrap obtained from ship breaking from Gujarat to SSMIPL godown in Mumbai. From the above investigation, it was clear that iron and steel scrap obtained by ship breaking covered by various invoices issued by the ship breaking units were either based upon the bogus/fake invoices or the goods covered by the said invoices never moved out of the State of Gujarat to SSMIPL based in Mumbai. Since the scrap covered by such invoices have not been received by SSMIPL, they could not have sold the same to the various persons including the present appellant. Enquiries were also made about the movement of goods from SSMIPLs godown to the present appellant. Enquiries with various truck drivers indicated that they were not aware of any godown of SSMIPL or lifted from the said godown and the scrap were lifted from various other places and thereafter delivered to the appellants factory. A large number of summons issued to various vehicle owners, transporters whose trucks were used to transport the scrap to the appellant, were returned by the postal authorities with the remarks left / not known. In addition to above statements of certain officials in the main appellants firm as also the three dealers involved in the present case (appellant No.3,4 & 5) were also recorded. Based upon the investigation, a show cause notice dated 4.2.2008 was issued to the appellants. After receiving the reply from the various appellants, the case was adjudicated by the Commissioner vide the impugned order wherein he confirmed the demand of Rs.1,36,84,255/- against the main appellant and equal amount of penalty has been imposed under Rule 13(2) of the Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Interest under Section 11AB was also confirmed. A penalty of Rs.30,00,000/- was imposed on appellant No.2 under Rule 13 of the Cenvat Credit Rules. A penalty of Rs.10,00,000/- each has been imposed on appellant No.3,4 & 5 under Rule 26 of the Central Excise Rules, 2002. Aggrieved by the said order, the appellants are before this Tribunal.
3. Learned counsel for the main appellant and appellant No.2 submitted that the three ship breakers viz. M/s. R.K. Steel Alloys Industries, M/s. Ajay Alloys Casting (P) Ltd. and M/s. Baldev Ship Breaking, whose factories were closed and whose fake invoices were used by SSMIPL, do not appear in any of the invoices on which they have taken the credit. In view of this position, Revenues submission in this regard is of no consequence.
3.1 The learned counsels next submission was relating to report from the Sales Tax authorities at Bhilad check post. It was submitted that the period under consideration is from January 2003 to February 2004 and hence the reliance placed on the letters dated 12.2.2004 and 13.2.2004 is incorrect. It was further submitted that the letter dated 24.5.2004 showing details for the period 2003-04 was not made part of RUD and, therefore, no reliance can be placed on the said letter. It was submitted that octroi details cannot be a basis either to demand duty or to deny credit in view of the following two decisions:-
(i) Raj Petroleum Products vs. CCE reported in 2005 (192) ELT 806 (T),
(ii) Lloyds Metal Engg. Ltd. vs. CCE reported in 2004 (175) ELT 132 (T).
3.2 The learned counsel further submitted that the next objection of the Revenue is that even some of the representatives of the ship breakers have stated that they have sold heavy plates to SSMIPL, which were not meant for melting purpose but for structural purpose. It was submitted that this statement is in favour of the appellant as this proves that SSMIPL has indeed shifted goods from ship breakers and the same was subsequently supplied to the appellant. It was also submitted that re-rollable scrap can also be used for melting purpose and the furnace employed in the appellants factory is capable of melting all types of scrap and, therefore, even if in case SSMIPL has procured metal plates from ship breakers and supplied the same to them, the same would have been used by the appellant as normal melting scrap. It was also submitted that statements of Shri Bansal and other ship breakers were not made part of RUD and, therefore, these statements are not sustainable under the law. It was also submitted that the appellant has taken a total credit of Rs.20,85,497/- only relating to the said ship breakers and in view of this, the entire denial of cenvat credit is perverse.
3.3 It was further submitted that Revenues contention that SSMIPL had fraudulently availed cenvat credit without actual receipt of ship breaking scrap and subsequently transferred the same inadmissible credit to the appellant without actually transferring any duty paid material and the appellant incorrectly availed credit on the parallel or duplicate invoices issued by SSMIPL. It was submitted that the appellant has placed purchased order on M/s. Meegora Steel Pvt. Ltd., M/s. Lachhmidhar Kashiram, M/s. Al Karim Scrap Traders Pvt. Ltd. for supply of heavy melting scrap. These suppliers have indeed supplied the goods through SSMIPL. SSMIPL in turn represented the goods after sold by them as duty paid in their invoices and gave reference to the dealers. It was submitted that the payment has been made through account payee cheque issued in favour of the above suppliers and thus the appellant has indeed received duty paid goods. It was submitted that the Revenue has failed to produce any evidence that the appellant has received non-duty paid goods from SSMIPL or from somewhere else. It was further submitted that the appellant was totally unaware of any fraudulent act of SSMIPL and has no reason to believe the goods are not duty paid. It was submitted that if SSMIPL has misrepresented and supplied non-duty paid goods, then the Revenue could proceed against SSMIPL and not against them and in support of the same, following case laws were quoted:-
(i) State of Madras vs. Radio & Electricals reported in 1966 (18) STC 222 (SC);
(ii) SRF Ltd. vs. CCE reported in 2000 (124) ELT 448 (T);
(iii) CCE vs. Sadashiv Casting reported in 2005 (187) ELT 381 (T);
(iv) CCE vs. Genesis reported in 2004 (176) ELT 496 (T);
(v) Haryana Steel Alloys vs. CCE reported in 2002 (148) ELT 377 (T);
(vi) CCE vs. Ashok Leyland Ltd. reported in 2001 (127) ELT 804 (T);
(vii) Shree Rolling Mills vs. CCE reported in 2001 (129) ELT 722 (T),
(viii) Century Laminating Co. vs. CCE reported in 2001 (127) ELT 268 (T).
3.4 As far as the Revenues contention that in some of the invoices the vehicle numbers mentioned were those pertaining to tankers, two-wheelers, three-wheelers etc., it was submitted that the appellant has maintained all records in respect of the goods received by them, which includes invoices and supporting documents like vehicle numbers, delivery challans, weighment slips etc. and, therefore, the said contention is not relevant. It was also submitted that some of the vehicle owners have denied of transporting any goods from Gujarat. It was submitted that as far as they are concerned, they have received the goods. It was also submitted that the Revenue has pointed out 10 specific invoices in respect of which vehicle owners have denied transport of goods from SSIMPL to the appellant. It was submitted that copies of nine invoices along with all supporting documents have already been submitted by them and for invoice No.722 dated 29.8.2003 mentioned at serial No.2 of the table, they have not received any material under the said invoice and have not availed any credit on the same.
3.5 As far as Revenues contention that key person and employees of the appellant have admitted that they have not received ship breaking scrap in their factory, it was submitted that they never placed orders for ship breaking scrap as is evident from the purchaser order and, therefore, employees statements are correct. The fact is also evident from the central excise invoices received and it is not possible for anybody to identify the origin of scrap. It was submitted that none of the employees have stated that they have not received scrap under the cover of the impugned invoices or that the appellant had procured commercial non-duty paid scrap from the market. It was also submitted that Revenue has not brought out any evidence to support that the records were fabricated. As far as Revenues objection that the appellant has not received duty paid scrap as shown in the invoices and has failed to take reasonable steps to ensure that the scrap received from SSMIPL had actually suffered duty and, therefore, not eligible to take credit, it was submitted that the appellant is bona fide buyer and consumer of scrap. They have indeed received quantity of scrap mentioned in the invoices issued by the dealers. The invoices were generic in nature and it was not of the nature that it could arouse suspicion in the appellants mind and the appellant had taken all reasonable steps before purchasing the scrap from registered dealer. Under the circumstances, denial of cenvat credit is incorrect. In support of the contention, the following case laws were submitted:-
(i) RS Industries vs. CCE reported in 2003 (153) ELT 114 (T);
(ii) CCE vs. Shakti Roll Cold Strips reported in 2007 (80) RLT 267 (T);
(iii) CCE vs. Neepaz Steels reported in 2007 (213) ELT 100 (T),
(iv) CCE vs. Kay Kay Industries reported in 2013 (295) ELT 177 (SC).
It was submitted that the Honble Supreme Court has discussed the concept of reasonable steps in the case of Kay Kay Industries (supra) and in view of the said decision, the appellant is eligible to take credit. It was also submitted that the Honble Gujarat High Court in the case of CCE vs. DP Singh reported in 2011 (270) ELT 321 (Guj.), has allowed the rebate of excise duty, even though the suppliers of the inputs manufactured were non-existent entities. It was also submitted that the Honble Gujarat High Court in the case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. reported in 2013 (290) ELT 61 (Guj.), has held that once the receipt of goods by person taking credit on the basis of necessary invoice is not disputed, then the person is eligible to take credit provided he had taken reasonable steps as described under Rule 7(2) of the Cenvat Credit Rules.
3.6 It was further submitted that extended period of limitation is not invokable in the facts of the case. There was no suppression of facts on the appellants behalf with intent to evade payment of excise duty. They were under the bona fide belief that credit of duty paid on the aforesaid inputs received from SSMIPL is correctly admissible to them. In support of their contention, they quoted the following two case laws:-
(i) Shabana Steel vs. CCE reported in 2007 (177) ELT 332 (T), and
(ii) IDL Chemicals vs. CCE reported in 1996 (88) ELT 710 (T).
3.7 It was submitted that Revenues reliance in the case of Tigrania Metals & Steel Industries reported in 2001 (132) ELT 103 (T) and Limenabh Chemicals reported in 1999 (68) ELT 77 (Mad.) is incorrect.
3.8 It was further submitted that no penalty is imposable on appellant No.2.
4. As far as appellant No. 3,4 & 5 are concerned, the submission was that they are not registered excise dealers and they have not dealt with the goods in question. It was submitted that they are trader-cum-commission agents for waste and scrap of iron and steel and collect orders from various customers and pass the orders to other traders on a commission margin. It was submitted that they have not issued any cenvat document or any excise invoice under Rule 11 of the Central Excise Rules, 2002 nor under Rule 9 of the Cenvat Credit Rules, 2002. It was further submitted that in the present case they have procured MS scrap from a registered dealer SSMIPL and sold the same directly, i.e. sale in transit to the main appellant, Khopoli. The goods have moved directly from the godown of SSMIPL to the main appellant under the central excise first stage dealer invoice of SSMIPL. It was submitted that did not receive any complaint from the main appellant about the quality of the scrap. No penalty can be imposed on them under Rule 26 of the Central Excise Rules. It was submitted that their explanation has not been brought out in the show cause notice and no contradictory evidence has been brought out in the show cause notice. It was submitted that since they have sold the goods in transit, the appellants have neither seen the consignment nor dealt with it. It was submitted even in the show cause notice, penalty was proposed under Rule 13 of the Cenvat Credit Rules and/or Rule 26 of the Central Excise Rules, 2002. This itself says that the investigating officers are also not sure of the correct contravention. It was also submitted that in the present case, the dispute is regarding incorrect availment of cenvat credit by the main appellant and if at all there is any contravention at their end, it has to be under Cenvat Credit Rules and, therefore, there is no question of imposing penalty under Rule 26. It was also submitted that under Rule 26 as was prevailing before 1.3.2007, penalty could have been imposed only if they are concerned with acquiring possession of or was in any way concerned in transporting, removing, dealing, selling or purchasing any excisable goods for which they had reasons to believe that they were liable for confiscation. It was submitted that Rule 26 is invokable if the appellants have dealt with the excisable goods which are liable for confiscation. In the present proceedings, the impugned order has held that if any goods manufactured by the main appellant and cleared by them on payment of duty or utilizing erroneously availed cenvat credit as liable for confiscation and the appellants have not dealt with the said finished goods so manufactured by the main appellant and in view of the position, the penalty imposed on them is incorrect. It was also submitted that the Tribunal in order No. A/517-523/14/EB dated 25.6.2014 in the case of Steel India Co. in similar circumstances, set aside the penalties.
5. Learned special counsel reiterated various findings of the Commissioner. The learned special counsel submitted that SSMIPL was doing only the fake transactions and actually no goods were being supplied by them. In the present case, the three dealers have only procured the invoices from SSMIPL and no goods were procured from them. It is clear from the statements of various transporters that they had not lifted the goods from SSMIPL but the goods were lifted from other places including the dealers, appellant No.3,4 & 5. This itself proves that what was being done was that the bazaari scrap was being procured by appellant No. 3,4 & 5 in order to avail the cenvat credit and invoices were being procured from SSMIPL. SSMIPL was not selling any ship breaking scrap as it has come out clearly in the investigation that no ship breaking scrap crossed the Gujarat border for SSMIPL. Therefore, there is no question of their selling the scrap. SSMIPL has procured some invoices from the ship breaking units. Some of the invoices procured were also fake. Based upon such details, SSMIPL has issued invoices in the name of the main appellant as required by appellant No. 3,4 & 5. It was submitted that it is important to note that the employees of the main appellant have very clearly stated that they have not received any ship breaking scrap. It was submitted that ship breaking scrap is very different from the bazaari/scavenger scrap. During ship breaking, it is mainly the plates of different thickness of very high quality marine steel that are produced and these plates are never used for melting for the simple reason that these are far more expensive than the bazaari scrap. Moreover, such plates will be required to be cut in small pieces by cutting through a welding process. This itself will involve cost and nobody would use the plates for melting. Other than plates, during the ship breaking, certain items are obtained such as furniture etc. which are sold as such. Some small quantity of iron and steel scrap of some other fixtures are also obtained. However, such scrap is of very small quantity and these are also segregated in the yard itself and are sold thereafter. It was submitted that the main appellant is a professional company and the employees there understand the scrap very well as the main appellant produces various iron and steel alloys and they themselves, after receipt of the scrap, do grading of the scrap. None of the employees have stated that they do not understand what is ship breaking scrap. On the contrary, they have very clearly stated that they did not receive any ship breaking scrap. It was further submitted that one of the very important aspects in the whole case is that none of the standard operation procedures were followed in respect of the scrap covered by the impugned dispute. There is no explanation whatsoever coming forward from the appellant either during the original adjudication or before this Tribunal why the standard operating procedures were not followed in respect of the receipt of the scrap. This itself shows that the senior officials in the main appellant-company were involved and there was a tactical approval from their side to receive the bazaari scrap in the guise of purported duty paid ship breaking scrap. No explanation has been given by the main appellant that why they did not get in touch with SSMIPL directly. Alternatively, there was no reason for them to procure the goods from three unregistered dealers and obtain the invoices of someone else. It cannot be a coincidence that all the three unregistered dealers will get invoices from one source viz. SSMIPL and that too for a period over one year. It was further submitted that the enquiries conducted with the driver and owner of the vehicles whose numbers appeared on the invoices issued by SSMIPL, revealed that none of them have transported material from the godown of SSMIPL to the main appellant. If the transporter had actually transported the scrap from SSMIPL to the main appellant, there was no reason form them to deny the said fact. It was further submitted that the appellants could have produced the drivers of the vehicles to prove that the goods had moved from the godown of SSMIPL to the main appellant. It was submitted that the driver of vehicle No. MCU 2671 had admitted to have delivered scrap to the main appellant. However, he has deposed that he had collected the scrap from the manufacturer in Thane area to the godown of Meegora Steels Pvt. Ltd. at Kalyan and the same was lifted from Meegora Steels Pvt. Ltd. and delivered to the main appellant. This example itself suggests that the scrap was being procured from various sources and supplied to the main appellant and invoices were being procured from SSMIPL. It was also submitted that Rule 3(1) of the Cenvat Credit Rules provides for availment of cenvat credit of duty paid on inputs received in the factory. It is, therefore, essential that the inputs should have suffered central excise duty. The provision cannot be construed to interpret availment of cenvat credit on the basis of documents showing payment of duty and receipt of any other material goods as is the case here. Further, the appellant has not taken any reasonable steps as per the requirements mentioned in Rule 7(2). It was submitted that in fact Lachhmidhar Kanshiram and Al-Karim have categorically stated in their reply that all transactions were made between SSMIPL and the main appellant and it is, therefore, evident that the main appellant has followed the provisions of Rule 3 of the Cenvat Credit Rules. It was further submitted by the special counsel for the Revenue that in identical circumstances and based upon the same investigation, this Tribunal has passed the judgment in the case of Bhagwati Steelcast Ltd. vs. CCE, Nashik reported in 2013 (293) ELT 417. The learned special counsel submitted that this judgment has been passed by a Bench of three Members by a majority decision and this decision is binding on the present Bench. It was further submitted that this case is also the outcome of the same investigations and the same facts have been discussed in the said judgment and all the arguments advanced by the learned counsel for the appellants are discussed in the said judgment. It was also submitted that small factual differences here and there mentioned by the counsels for the appellants will not make any difference in the conclusion whatsoever. For example, the fact that in none of the invoices, the name of the three ship breakers who had closed their unit is mentioned, will not make any difference because the same has been mentioned in the show cause notice to indicate the conduct and working of SSMIPL. It was also submitted that in the present case the main appellant did not even contact SSMIPL directly but involved three other traders and all the three went to SSMIPL alone and that also for all supplies for over one year. It was again emphasized that there is no explanation whatsoever coming forward why the standard operating procedures of the company were not followed in respect of the consignments received and covered by the present show cause notice. In view of this factual position, the learned special counsel submitted that the order of the Commissioner is required to be upheld.
It was also submitted that Shri S.V. Sirsikar was looking after day-to-day procurement of materials and such a thing cannot happen without his tactical approval and active connivance. Similarly, the three dealers involved in the case might have supplied the scrap from some non duty paid sources and procured invoices from SSMIPL. They are, therefore, concerned with the goods and penalty is imposable under Rule 26 in view of the judgment of the Honble Punjab & Haryana High Court in the case of Vee Kay Enterprises vs. CCE reported in 2011 (266) ELT 436 (P&H) and the said judgment has been followed by the High Court in the subsequent cases also.
6. We have considered the rival submissions. In the present case, Revenues contention is that the duty paid invoices received from first stage registered dealer cannot be accepted for two reasons. The first reason being that first stage dealer himself has not received the goods mentioned in the invoices from the corresponding original ship breaking units. The second reason is that the goods received by the main appellant is not the ship breaking scrap covered by the said invoices but some other scrap say bazaari/scavenger scrap or other non duty paid scrap. Since the main appellant has not received the duty paid scrap covered by the invoices of the first stage dealer, they could have not availed the cenvat credit. We find that based upon the same investigation, number of show cause notices were issued to different users of scrap and in fact in respect of five units, the case was decided by this Tribunal in the case of Bhagwati Steelcast Ltd. vs. CCE, Nashik reported in 2013 (293) ELT 417. This Tribunal has observed as under:-
73. It follows from the above that the? method of implementation adopted in India is the tax credit method. This economic concept of Value Added Tax has been encapsulated within the framework of Central Excise law as follows :
73.1 Under Section 37 of the Central? Excise Act, 1944, the Central Government has been given the power to make rules to carry out, in effect, the purposes of the Act. Clauses (xvi)(a) and (xvi)(aa) of sub-section (1) of the said Section provides for making of rules to provide for mechanism for credit of the duty paid or deemed to have been paid on the goods used in or in relation to the manufacture of the goods and the credit of service tax leviable under the Finance Act, 1994 used in or in relation to the manufacture of excisable goods.
73.2 Rules 11 of the Central Excise? Rules, 2002 stipulates that no excisable goods are to be removed from a factory or warehouse except under an invoice signed by the owner of the factory or his authorised agent. Sub-rule (2) of the said Rule stipulates that the invoices shall be serially numbered and shall contain registration number, address of the concerned Central Excise Division, name of the consignee, description, classification and date of removal, mode of transport and vehicle registration number, rate of duty, quantity and value of goods and the duty payable thereon. The proviso to the said rule provides the dispensation of the copies of the invoices i.e., original copy for the buyer, duplicate for the transporter and triplicate for the assessee. Sub-rules (4) to (6) deal with certain procedural requirements relating to invoices and sub-rule (7) provides that the provisions of said Rule shall apply mutatis mutandis to goods supplied by a first stage dealer or a second stage dealer. Similar provisions were stipulated in the Central Excise Rules, 2001 and also the Central Excise Rules, 1944 to the same effect.
73.3 The Cenvat? Credit Rules, 2004, deal with the procedure relating to availment of credit. As per Rule 3, a manufacturer or a producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as Cenvat credit) of the duties specified therein paid on any inputs or capital goods and received by the manufacturer for use in or in relation to the manufacture of final products. Rule 4 of the said Rule stipulates that Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Rule 9 of Cenvat Credit Rules, 2004 deals with the documents and accounts on the basis of which the Cenvat credit can be taken and this includes an invoice issued by a manufacturer, an importer, a first stage dealer or second stage dealer. Sub-rule (2) further stipulates that no Cenvat credit shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994 are contained in the said document. In case any particulars are missing, Cenvat credit may be taken only with the prior approval of the jurisdictional Asst./Dy. Commissioner of Central Excise, if he is satisfied that the goods or service covered by the document have been received and accounted for in the books of account of the receiver. Sub-rule (4) of the said rule further stipulates that the Cenvat credit in respect of input or capital goods purchased from a first stage dealer or second stage dealer shall be allowed only if such first stage dealer or second stage dealer, as the case may be, has maintained records indicating the fact that the input or capital goods was supplied from the stock on which duty was paid by the producer of such input or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him. Sub-rule (5) further stipulates that the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacturer or provider of output service taking such credit. Similar provisions existed in Rule 57A of the Central Excise Rules, 1944, Rule 7 of the Cenvat Credit Rules, 2001 and 2002.
73.4 From the above? provisions of law, it becomes evident that to avail Cenvat credit, the inputs or capital goods should have suffered the stipulated duty by the producer/manufacturer of such goods and the goods should be received by the manufacturer availing credit in his factory and the inputs or capital goods so received should be utilised in or in relation to the manufacture of final products. In respect of inputs received from a first or second stage dealer, an additional condition is stipulated to the effect that the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such goods and only an amount of such duty on pro rata basis has been indicated in the invoices issued by him. It is further stipulated that the burden of proof regarding admissibility to Cenvat credit shall lie upon the manufacturer taking such credit. Sub-rule (2) of Rule 7 of the Cenvat Credit Rules, 2001/2002 (as they stood at the relevant time) further stipulated that a manufacturer/producer taking Cenvat credit on inputs or capital goods shall take all reasonable steps to ensure that the inputs or capital goods in respect of which he has taken Cenvat credit are goods on which appropriate duty of excise as indicated in the document accompanying the goods has been paid and the manufacturer shall be deemed to have taken reasonable steps if he satisfies himself about the identity, name and address of the manufacturer/supplier issuing the document specified in the said Rule either from his personal knowledge or on the strength of a certificate given by a person with whose handwriting or signature he is familiar with or on the strength of a certificate issued to the manufacturer or supplier by the jurisdictional Superintendent of Central Excise.
73.5 The Central? Excise duty regime underwent a significant change with effect from 1-10-1996. Under the new regime, assessment of the tax liability by the department which hitherto existed was done away with and self assessment facility was extended to the assessees.
73.6 Paragraphs 134? and 135 of the Finance Ministers Budget Speech for the year 1996-97 lucidly explains the new regime which was introduced.
134.?Our excise procedures are outdated and not in tune with the times. They need to be modified. They should encourage voluntary compliance with tax laws by the tax payers. With effect from 1st October, 1996, assessees would no longer be required to furnish copies of invoices along with the monthly returns. All that they would be required to furnish to the excise department will be a simple Return indicating the duty paid on self-assessment basis. Wherever possible the assessees computers could also be linked to the Departments computers for on line assessment.
135. I also propose to introduce a scheme of selective audit by?the excise officers and dispense with the existing scheme of routine examination and checking of returns and documents furnished by the assessees. This scheme would also come into force from 1st October, 1996. While introducing the new regime, in para 138 thereof, the Finance Minister also observed as follows :
138. The Modvat scheme which provides for duty credit on inputs?and capital goods has been liberalised considerably over the past few years. Still, there are problems about the coverage of certain inputs and capital goods. I propose to clarify the scope of eligible capital goods by specifying the heading and sub-headings of the tariff relating to capital goods in the Modvat Rules. It is also a matter of concern that there is misuse of the Modvat credit scheme. At present, Modvat invoices can be issued by any dealer registered with the excise department and this facility is reportedly being misused. Therefore, I propose to restrict the issue of Modvatable invoices by dealers up to two stages. Suitable provisions are also being made in the Modvat Rules for charging of interest in the case of wrong availment of Modvat credit and for mandatory penalty for misuse of Modvat facility. It is in this background and context, the issues involved in the present case need to be examined. 6.1 The present case is covered by category 3 in para 74 of the above mentioned order and in that context, the Tribunal has observed in para 75 as under:-
75. The next issue for consideration is regarding the demand in respect of invoices issued by dealers based on ship-breakers invoices. These invoices are 669 in number and the duty credit involved is approximately Rs. 1.02 crore. The case of the Revenue is that the scrap has been procured from ship-breakers in Alang/Bhavnagar in Gujarat by the first stage dealers, M/s. Simandhar Enterprises (SE in short) and M/s. Simandhar Steel Movers (India) Pvt. Ltd. (SSMIPL in short). Some of the ship-breakers whose name figures in the invoices issued by the first stage dealers, from whom the ship-breaking scrap was allegedly procured, namely, M/s. R.K. Steel Alloy Industries, Pipavav, M/s. Ajay Alloys Castings Pvt. Ltd. and M/s. Baldev Shipbreakers, Alang had closed down their activities since a long time and hence the invoices said to have been issued by them are not genuine. This fact has been confirmed by the letter dated 5-2-2004 and 15-4-2004 issued by the Superintendent of Central Excise, Alang. Further, enquiries made with the transport authorities in Gujarat regarding transport of goods from Gujarat to Bhiwandi/Mumbai revealed that in some cases, the vehicles used for transportation were motorcycles, tankers, cars, autorikshaws, delivery vans, etc., incapable of transporting iron and steel scrap. The third set of evidence are statements of a few of the transporters who were purported to have transported goods from Gujarat to the premises of dealers at Bhiwandi/Mumbai and who have denied transporting any goods from Gujarat to Mumbai. The fourth set of evidence are statements from some of the ship-breakers, namely, Gupta Steel (Ship-breakers), Shirdi Steel Traders, Malwi Ship-Breakers, Panchvati Ship-Breakers and Bansal Shipbreakers. From these statements it is evident that they have not supplied any steel melting scrap to M/s. Simandhar Steel Movers (India) Pvt. Ltd. or Simandhar Enterprises. Instead, they have supplied steel plates of various dimensions or re-rollable scrap. The fifth set of evidence are three letters dated 12-2-2004, 24-5-2004 and 12-1-2005 issued by the Sales Tax Officer, Bhilad checkpost and Dy. Commissioner of Sales Tax (Enforcement), Gujarat wherein they have confirmed that no consignment of iron and steel scrap addressed to the aforesaid two dealers, namely, Simandhar Steel Movers (India) Pvt. Ltd. and M/s. Simandhar Enterprises has crossed the sales tax naka at Gujarat Border during the period 2000-2004 as per the official records. Inasmuch as the goods have not crossed Gujarat border, the above two dealers could not have supplied any ship-breaking scrap to the appellants herein and, therefore, the credit availed on such ship-breaking scrap is not admissible in law. It has been further noticed in some cases that the prices at which the first stage dealers allegedly supplied the goods to the appellants are less than the prices at which the dealers procured the same from the ship-breakers in Gujarat and the price differences vary from Rs. 1,000/- to as high as Rs. 3,000/- per MT which also suggest that the goods, if any, supplied to the appellants are not the same as those received from the ship-breakers at Alang, Gujarat.
75.1 The counter? arguments adduced by the appellants are as follows. There is no restriction that the re-rollable scrap received from ship-breakers cannot be used as steel melting scrap and this issue has been settled by the Honble Apex Court in the case of Tata Iron and Steel Co. Ltd. v. Commissioner of Central Excise - 1995 (75) E.L.T. 3 (S.C.). It has also been argued that it is not the responsibility of the appellants to ascertain the source of scrap by the dealers and how it has been transported. So long as they have paid the consideration for the scrap received and paid the duty liability thereon, they are entitled for the Cenvat credit. It has also been argued that scrap could have been transported from Gujarat to Mumbai not only through Bhilad checkpost but also through other checkposts and, therefore, the letters of the sales tax authorities at Bhilad does not conclusively establish that the scrap has not been received by the aforesaid dealers. Further, doubts have been expressed about the reliability of the records maintained by the sales tax authorities at Bhilad checkpost. It has also been argued that the appellants cannot be asked to prove the impossible about the movement of scrap from Gujarat to Mumbai. It has also been contended that there has been denial of principles of natural justice inismuch as the department has not furnished a copy of the letter written by them to the Sales Tax Authorities in Gujarat and they have reserved the right to cross-examine the Sales Tax Authorities once the copy of the letter written by the department to the said authorities is furnished. Reliance has been placed on the judgments of this Tribunal in the case of Transpek Industry Ltd. v. Commissioner of Central Excise - 2010 (249) E.L.T. 91 and Monarch Metals P. Ltd. v. Commissioner of Central Excise, Ahmedabad - 2009 (95) RLT 334 = 2010 (261) E.L.T. 508 (Tri.-Ahmd.) and the Narmada Bachao Andolan case.
75.2 I have? carefully considered the rival submissions and my conclusions are as under : It is a well known fact that ship-breaking scrap is a high quality scrap made of marine steel and usually it is a re-rollable scrap which are used by rolling mills and are not used for melting purposes as done by the appellants herein. Reliance placed by the appellants in the case of Tata Iron and Steel Co. cited supra, does not help their case. The dispute in that case related to classification of melting/re-melting scrap and the scrap involved in that case was those generated in the course of manufacture of iron and steel products. In that context, the Honble Apex Court held that scrap arising in the manufacture of various iron and steel products are treated as melting scrap in developed as well as developing countries and as per the definition of melting scrap, scrap which cannot be used for any other purpose but can be charged into furnace for melting should be classified as melting scrap. Nowhere in the said case, the Apex Court held that re-rollable scrap is a melting scrap. As per the statements given by the ship-breakers relied upon by the Revenue, it is clear that what was supplied by the ship-breakers were steel plates and re-rollable scrap which are not generally used for re-melting and are generally used by rolling mills. It is further on record that the price of scrap supplied by the ship-breakers to the dealers in the many cases were higher than the prices charged by the dealers to the appellants for the scrap supplied by them which again points to the fact that the scrap supplied by the dealer to the appellants were not the same as obtained from the ship-breakers in Gujarat. There is no substantial time lag between dates of invoices issued by the ship-breakers to the dealers and those issued by the dealers to the appellants and in most of the cases, the time lag is only a week or two. Therefore, variation in prices cannot be attributed to lags in time. Thus, the details contained in the documents mentioned above is a clear indicator of the fact that what has been allegedly received by the appellants from the dealers are not the same as what has been received by the dealers from the ship-breakers. This conclusion is further corroborated/strengthened by the reports of the Transport Authorities in Gujarat wherein it was found that some of the vehicles said to have been used for transportation were two-wheelers, three-wheelers, etc., which are incapable of transporting steel scrap. Again in a few cases, statements of the transporters (owners of vehicles which figure in the invoices) were recorded and they have denied transporting any scrap from Gujarat to the dealers in Mumbai/Bhiwandi. These facts have been further corroborated by the letters issued by the checkpost and sales tax enforcement authorities in Gujarat which categorically state that no vehicle carrying scrap from the ship-breakers to the two dealers in Mumbai have crossed the commonly used checkpost at Bhilad during the impugned period. Thus, it is not one single piece of evidence but a series of evidences that have been brought out by the Revenue which corroborate and strengthen each other and which substantiate the fact that from the documents available on record, the scrap claimed to have been received by the appellants are not the same as those supplied by the ship-breakers in Gujarat on which duty has been paid. In other words, the goods said to have been received by the appellants are different from the goods covered by the documents on record. These evidences, unearthed by the investigation, have not been controverted in any substantial or meaningful way by the appellants except for the bland statement that they are not required to do so. As regards the allegation of denial of natural justice in non-furnishing the letter written by the department to the sales tax authorities, the said letter is not a relied upon document in any of the show cause notices. What is relied upon is the reports received from the sales tax authorities copies of which have been furnished to the appellants. In the case of Ralectronics v. UOI [1994 (71) E.L.T. 26 (Kar.)], the Honble High Court of Karnataka in a similar issue held that - the requirement is to furnish the copies of the materials relied upon in the show cause notice and not of the documents and other materials just referred. There is a difference between relying upon a document and referring to the same. Further in the instant case, the department has not examined any of the Sales Tax authorities; therefore, the question of cross-examination does not arise at all since without examination by the department, there cannot be a cross-examination by the appellants. Further, the case is not made out solely on the basis of reports of the sales tax authorities. The said reports is only one of the evidences which corroborates and supports the other evidences. Thus I find that the appellants have raised this plea for the sake of the argument rather than pointing out a de facto illegality in the proceedings. A similar view was held by this Tribunal in the case of R.K. Mill Board Pvt. Ltd. case [2001 (135) E.L.T. 1296 (Tri.-Del)]. The Honble Apex Court in the case of Kanungo & Co. v. CC, Calcutta [1983 (13) E.L.T. 1486 (S.C.)], while dealing with the breach of natural justice held as follows - In the show cause notice issued on August 21, 1961, all the materials on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities.. The same reasoning applies to the facts of the present case. Therefore, I do not find any merits in this argument adduced by the appellants and reject the same.
75.3 As regards? the case laws relating to Transpek Industry Ltd. and Monarch Metals Pvt. Ltd., cited supra, the facts of those cases are different and distinguishable. In Transpek Industry Ltd.s case, the issues related to purchase of capital goods by the appellant therein from a registered dealer on payment of duty. In that case there was no dispute about the goods supplied by the dealer and receipt of the same by the assessee. In that context it was held that the assessee buying goods from a registered dealer cannot be expected to examine as to whether the credit availed by such dealer is in accordance with law or not. In the other case pertaining to Monarch Metals Pvt. Ltd. it was held that transporters incriminating statements being in the nature of statements of the co-accused are not a reliable evidence. In the case before me, the charge against the appellant is that the goods on which they have taken Cenvat credit are not the same as the goods appearing in the invoices and transport documents on which duty has been paid. In other words, the dispute is about the identity of the goods on which credit has been taken and also about the fact whether goods have been received at all by the appellants. Thus, the facts in the case laws relied upon by the appellants are completely different and distinguishable from those involved in the present case. The evidences unearthed by the investigation in the present case are several and overwhelming, each piece of evidence corroborating and supporting the other. Once the department by way of evidences show that the transactions are not genuine, the onus of proving that the transactions are genuine lies on the appellants which the appellants have failed to do miserably.
75.4 Sub-Rule (4)? of Rule 7 of Cenvat Credit Rules, 2002 makes it abundantly clear that the onus of proving admissibility to Cenvat credit lies on the person who is availing the credit. I find that in the instant case, this onus has not been discharged by the appellants at all. On the other hand, I find that reliance placed by the Revenue in the case of Besco Ltd. (supra) [2001 (137) E.L.T. 168 (Tri.-Kol.)] is relevant to the facts of the case. In that case, the issue related to purchase of bazaar scrap and showing the same as having been brought from dealers registered with the excise department who had issued the invoices without actually supplying the material. In that case, it was held by this Tribunal that the department cannot be expected to go to the source from where the appellants might have procured the bazar scrap and as long as the department can corroborate by evidences to show mala fide nature of transactions, the same is sufficient. In the instant case, I find that a lot of evidence have been brought on record by way of statements of the transporters and suppliers of goods, reports from the RTO and Sales Tax/Checkpost authorities, and so on to show that the entire transactions were fake and not genuine.
75.5In the case? of A.N. Guha & Co. v. Collector [1996 (86) E.L.T. 333], this Tribunal held that it is not necessary for the department to establish a fact with mathematical precision. Once the presumption as to the existence of a fact is raised against the assessee that the input has not been transported in the vehicle mentioned in the invoices, it is reasonable to say that the inputs were not received in the factory. In the case of R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P., (order dated 8-10-2003 in Civil Appeal No. 10585 of 1996) the Honble Apex Court held as follows :
Whether a civil or a criminal case, the anvil for testing of proved, disproved and not proved, as defined in Section 3 of the Indian Evidence Act, 1872 is one and the same. A fact is said to be proved when, if considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of a particular case, to act upon the supposition that it exists. It is the evaluation of the result drawn by applicability of the rule, which makes the difference. The probative effects of evidence in civil and criminal cases are not however always the same and it has been laid down that a fact may be regarded as proved for purposes of a civil suit, though the evidence may not be considered sufficient for a conviction in a criminal case. BEST says : There is a strong and marked difference as to the effect of evidence in civil and criminal proceedings. In the former a mere preponderance of probability, due regard being had to the burden of proof, is a sufficient basis of decision : but in the latter, especially when the offence charged amounts to treason or felony, a much higher degree of assurance is required. (BEST, S. 95). While civil cases may be proved by a mere preponderance of evidence, in criminal cases the prosecution must prove the charge beyond reasonable doubt. (See Sarkar on Evidence, 15th Edition, pp. 58-59) In the words of Denning LJ (Bater V.B, 1950, 2 All ER 458, 459) It is true that by our law there is a higher standard of proof in criminal cases then in civil cases, but this is subject to the qualification that there is no absolute standard in either case. In criminal cases the charge must be proved beyond reasonable doubt, but there may be degrees of proof within that standard. So also in civil cases there may be degrees of probability. Agreeing with this statement of law, Hodson, LJ said Just as in civil cases the balance of probability may be more readily fitted in one case than in another, so in criminal cases proof beyond reasonable doubt may more readily be attained in some cases than in others. (Hornal V. Neuberger P. Ltd, 1956 3 All ER 970, 977).
75.6 In the case of? Collector of Customs, Madras v. D. Bhoormul cited supra [1983 (13) E.L.T. 1546 (S.C.)], the Honble Court further held as follows :
It cannot be disputed that in proceeding for imposing penalties, under Clause (8) of S.167 to which S. 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contrary. But in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs, absolute certainty is a myth, and as Prof Brett felicitously puts it all exactness is a fake El Dorado of absolute proof being unattainable, the law accepts for it, probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus, legal proof is not necessarily perfect proof; often it is nothing more than a prudent mans estimate as to the probabilities of the case. The other; cardinal principle having an important bearing on the incidence of burden of proof is that sufficiency and weight of the evidence is to be considered - to use the words of Lord Mansfield in Batch v. Archer (1) according to the proof which it was in the power of one side to prove, and in the power of the other to have contradicted. Since it is exceedingly difficult, if not absolutely impossible, for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as parts of its primary burden. Smuggling is clandestine conveying of goods to avoid legal duties. Secrecy and stealth being its covering guards, it is impossible for the Preventive Department to unravel every link of the process. Many facts relating to this illicit business remain in the special or peculiar knowledge of the person concerned in it. On the principle underlying S.106, Evidence Act, the burden to establish those facts is cast on, the person concerned; and if he fails to establish or explain those facts, an adverse inference of facts may arise against him, which coupled with the presumptive evidence adduced by the prosecution or the Department would rebut the initial presumption of innocence in favour of that person, and in the result prove him guilty. As pointed out by Best in Law of Evidence, (12th Edn. Article 320, page 291), the Presumption of innocence is, no doubt, presumption juris, but every days practice shows that it may be successfully encountered by the presumption of guilt arising from the recent (unexplained) possession of stolen property, though the latter is only a presumption of fact - Thus the burden on the prosecution or the Department may be considerably lightened even by such presumption of fact arising in their favour. However, this does not mean that the special or peculiar knowledge of the person proceeded against will relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It will only alleviate that burden to discharge which very slight evidence may suffice. 75.7 The concepts? of reasonable doubt and pre-ponderance of probability have been lucidly explained by the Honble Apex Court in the case of State of Rajasthan v. Mohan Lal [2009 (237) E.L.T. 435 (S.C.)] as follows :-
36. Doubts would be called reasonable if they are free from a zest?for abstract speculation. Law cannot afford any favourite other than truth. To constitute reasonable doubt, it must be free from overemotional response. Doubts must be actual and substantial doubts as to the guilt of the accused persons arising from the evidence, or from the lack of it, as opposed to mere vague apprehensions. A reasonable doubt is not an imaginary, trivial or a merely possible doubt, but a fair doubt based upon reason and common sense. It must grow out of the evidence in the case.
37.?The concepts of probability, and the degrees of it, cannot obviously be expressed in terms of units to be mathematically enumerated as to how many of such units constitute proof beyond reasonable doubt. There is an unmistakable subjective element in the evaluation of the degrees of probability and the quantum of proof. Forensic probability must, in the last analysis, rest on robust common sense and, ultimately, on the trained intuitions of the Judge... 75.8?From the case laws cited above, the department need not prove the case with mathematical accuracy. So long as the department has established the case with such a degree of preponderance the existence of a fact, it is sufficient. In the instant case, the burden to establish eligibility to the credit is on the appellant-assessee and if they fail to establish or explain the facts established by the department, an adverse inference arises against them coupled with the presumptive evidence adduced by the department.
75.9 The? appellants have also argued that if they are required to show that the dealer from whom they purchased the scrap procured the same legitimately, they are being asked to prove the impossible, which is not permissible and have placed reliance on the judgment of the Apex Court in the Narmada Bachao Andolan case. This argument of the appellants has no relevance to the case under consideration. The Honble Apex Court in Shanker Raju v. UOI [2011 (271) E.L.T. 492 (S.C.)] observed thus :
Where the Legislature clearly declares the intent in the scheme of a language of a statute, it is the duty of the Court to give full effect to the same without scanning its wisdom or policy and without engrafting, adding or implying anything which is not congenial or consistent with such express intent of Legislature. Hardship or inconvenience cannot alter the meaning employed by the Legislature, if such meaning is clear on the face of the statute. If the statutory provisions do not go far enough to relieve the hardship of the member, the remedy lies with the Legislature and not in the hands of the Court. 75.10 Similarly in? the case of India Agencies v. Additional Commissioner of Commercial Taxes, Bangalore [(2005) 2 SCC 129], the Supreme Court observed that if the condition on which the concession was granted was mandatory, then a liberal view could not be taken merely on the ground that there was hardship to the dealer. Issues of hardship, ruled the Supreme Court, are for the Legislature to consider.
75.11 Rule 7(4) of? Cenvat Credit Rules, 2002 (or corresponding provisions in its predecessor or successor Rules) as it stood at the relevant time placed the onus of eligibility to avail the credit on the person taking the Cenvat credit. Once the Revenue discharges the burden that the particulars declared in the documents on the strength of which the credit has been availed are not genuine or are fake, then the onus is on the assessee to prove that they have availed the credit correctly and are entitled for the credit. That onus cannot be condoned on the ground of hardship or inconvenience. In the instant case, the appellants have not discharged this onus cast on them by the statute.
75.12 In the light? of these judgments of the Honble Apex Court, in the case under consideration, I am of the considered view that the appellants are not entitled to avail Cenvat credit of the duty paid on ship-breakers invoices. 6.2 We find that in addition to the above arguments, the learned counsel has also raised the issue relating to parallel invoices and extended period of time. We find that these issues have also been discussed in the case of Bhagwati Steel Cast (supra). The relevant portions are extracted below:-
76. The next issue? for consideration is whether the appellants are eligible to avail Cenvat credit on account of duplicate/parallel invoice.
76. 1 The number of? invoices involved is 1089 entailing a credit of Rs. 2.44 crore approx. The case of the department is that in the RG-23D account maintained by the dealers, the invoices issued to the appellants are not reflected and invoices bearing the same number are shown to have been issued to other buyers though for a different quantity and value. Further, in many cases, the transporters who are said to have transported these goods from the dealers premises to the appellants have denied transporting these goods. In the case of appellants situated in Nasik, the Municipal Corporation authorities have confirmed that as per their records, escort permits, which are statutorily required for movement of these goods into the Corporation area, have not been issued at all which again corroborates the fact that the impugned goods (melting scrap) have not been received by the appellants at all.
76.2 In the case? of M/s. Amar Ispat Pvt. Ltd., one of the appellants in the present case, Sri Sunil Fakirchand Agarwal, who was working as the General Manager of the said appellant-firm during the material period, in his statement dated 3-8-2006, recorded under Section 14 of the Central Excise Act, 1944, averred as follows :-
To-day you have shown me the invoices issued by M/s. Simandhar Steel Movers India Pvt. Ltd. to M/s. Amar Ispat Pvt. Ltd. and the copies of the RG 23D register maintained by M/s. Simandhar Steel Movers Pvt. Ltd. I agree that 357 invoices issued by M/s. Simandar Steel Movers India Pvt. Ltd. to M/s. Amar Ispat Pvt. Ltd. are not accounted for in the records of M/s. Simandhar Steel Movers Pvt. Ltd. In this regard, it is only possible that M/s. Simandhar Steel Movers India Pvt. Ltd. were supplying only locally procured iron and steel scrap and to give benefit of cenvat credit to the customers were issuing fraudulent invoices. In respect of the 172 invoices which are appearing on the records of M/s. Simandhar Steel Movers Pvt. Ltd. from the evidences shown by you I agree that the invoices are issued against supply of locally procured iron and steel scrap. In the very same statement, it has been further admitted that the cenvatable invoices, delivery challans and bills were sent directly to the office of M/s. Amar Ispat Pvt. Ltd. at Tulsi Dham, Thane (W) and the invoices were subsequently sent to the factory to make entries in the cenvat account. This admission clearly shows that the invoices did not accompany the goods. As regards the statements of the transporters (whose vehicle nos. appear in the invoices) denying the transportation of the goods, the General Manager has stated that he has no reason to dispute these statements and the reports given by the RTOs and he could not confirm whether the invoices issued by M/s. Simandhar Steel Movers India Pvt. Ltd. to M/s. Amar Ispat Pvt. Ltd. were for the goods actually supplied by them. The above statement of the General Manager has also been corroborated by the Director of the said firm Mr. Sandeep Bhagwandas Garg who in his statement dated 29-7-2006, inter alia, admitted as follows :-
Most of the times the invoices were sent to us subsequently by the broker in a large envelop or folder, so most of the times the invoices were not accompanying the trucks, but subsequently handed over by the broker.
76.3 In the case of Jai Prakash Strips,? the department had recorded the statement of one Mr. Vinod Pandey, Quality Control In-charge who was in charge of the receipt of the material in their factory. In his statement dated 2-7-2005, he has, inter alia, admitted that they were receiving M.S. scrap like mix scrap such as small cuttings of plates, pipes and remnants. In his statement dated 30-4-2004, Mr. H.S. Shah, Director of M/s. Simandhar Steel Movers (P) Ltd., had, inter alia, stated that they were dealing in both cenvatable material as well as non-cenvatable material. Both these goods were stored in the same godown at Bhiwandi. The non-cenvatable material covers the scrap material such as pieces of angle-channel, plate cuttings, pieces of pipes etc. On comparison of these two statements with respect to the nature of the materials supplied by the dealer and received by the appellants, it is clear that the material was non-cenvatable material. In other words, non-cenvatable material was supplied under the cover of invoices for cenvatable material, which once again shows that the documents supplied by the said dealer did not pertain to the goods supplied and the Cenvat credit was transferred fraudulently.
76.4 The appellants contention is that? they are not responsible for maintenance of the accounts by the dealer. So long as they have paid consideration for what has been received by them, it is sufficient and they cannot be expected to undertake any responsibility more than this.
76.5 This argument is wrong for the? following reasons. Sub-rule (3) of Rule 7 of Cenvat Credit Rules, 2002 as it stood at the relevant time (as also its predecessor and successor rules) clearly provided that Cenvat credit in respect of inputs or capital goods purchased from a first or second stage dealer shall be allowed only if such dealer has maintained records indicating the fact that the inputs or capital goods supplied from the stock on which duty was paid by the producer of such goods or capital goods and only an account of such duty on pro rata basis has been indicated in the invoice issued by him. From the records available, it is seen that bulk of the invoices issued to the appellants do not figure in the RG-23D account maintained by the dealer. Therefore, as per the provisions of sub-rule (3) of Rule 7, the appellants are not entitled for the credit. Further, it is seen from the invoices issued to the appellants that the date of issue of these invoices are invariably subsequent to the date of invoices bearing the same number issued to the other parties. If the goods have already been supplied to other parties, the question of issuing invoices bearing the same number to the appellants herein, though for a different quantity and value does not arise. This is a clear pointer to the fact that the invoices issued to the appellants were duplicate/bogus. Otherwise, there was no need to issue invoices at a subsequent date(s) in almost all cases. Thirdly, when stock taking was undertaken in the premises of the dealer both in 2001 and 2003, it was found that there was no stock of the goods at all whereas the invoices were issued even without physical stock being available. This is evident from the panchnama proceedings of the stock taking undertaken at the dealers premises. Further, there are statements from some of the appellants officials stating that they did not receive the invoices issued by the dealers along with the goods but the invoices were received a few days later. In other words, this clearly shows that only invoices were traded and not goods. Fourthly, the certificate issued by the Nasik Corporation authorities available on record clearly shows that in respect of the appellants situated in Nasik, the goods did not enter the Corporation limits at all. These evidences unearthed by the department clearly reveal that the transactions were bogus and fake. Further, there has been no effective rebuttal of these presumptions raised by the Revenue against the appellants and as per sub-rule (4) of Rule 7 of the Cenvat Credit Rules, as it stood at the relevant time the onus of proving that they are eligible for the Cenvat credit lies on the appellants which they have failed to discharge. Therefore, ratio of the judgment in the cases of D. Bhoormul, cited supra, and A.N. Guha cited supra, apply squarely to the facts of the case and, therefore, even in respect of the parallel invoices/duplicate invoices the appellants are not entitled for the credit.
76.6 The facts of a case decided by the? Honble High Court of Bombay on 11th May, 2012 in M/s. Mahalaxmi Cotton Ginning Pressing and Oil Industries v. The State of Maharashtra & Ors. [2012 (191) ECR 0433 (Bombay)] closely resembles the case before me and the ratio decided therein has great relevance. In that case, the constitutional validity of Section 48(5) of the Maharashtra Value Added Tax Act, 2002 was under challenge. If the constitutional validity was upheld, the petitioner sought a mandamus to the State to recover from the vendor tax paid on goods of which a set-off was claimed. Consequential orders of set-off and refund were sought. The petitioner was a re-seller of cotton bales and he filed tax returns and based on the purchases effected, claimed Input Tax Credit (ITC) by way of set-off under Section 48. The petitioner supported his claim by tax invoices of his vendor. The petitioner claimed to have submitted data, transaction-wise, in relation to its supplier, including invoice number, date of supply, registration number of the supplier and VAT paid on each purchase. The Dy. Commissioner of Sales Tax informed the petitioner a list of dealers from whom the petitioner had effected purchases where the data received was matched or, as the case may be, unmatched. The petitioner was called upon to submit ledger copies and proof of the filing of returns by the dealer in those cases where the data was unmatched. Failing this, it was stated that the ITC of the concerned dealers would be disallowed. The assessing officer disallowed set-off where the data did not match. The petitioner challenged the assessment by way of a Writ Petition before the Honble High Court of Bombay. On behalf of the petitioner, it was contended that the VAT Act did not provide any machinery for the purchaser to ascertain whether the seller has actually paid VAT and the act did not protect the purchaser in a case where the seller has not paid the tax into the Government Treasury which he had collected from the customer and this constitutes an unreasonable classification between the seller and the purchaser. Section 48(5) of the said VAT Act was arbitrary as it contemplates disallowance of ITC claimed by the purchaser if the seller had not deposited tax into the treasury and no provision had been made if tax is recovered from the seller by the State in future. It was also argued that Section 48(5) cast a burden on the purchasing dealer which is impossible to perform since the Act and the Rules do not empower the purchasing dealer to seek any document from the vendor other than the tax invoices for the purchases made. Section 48(5) would cast an unbearable burden on the purchasing dealer. Though he has paid tax to the vendor, if a set-off is disallowed, he would be liable to pay the same amount to the Revenue once again together with interest and penalty which may result in closure of business contrary to Articles 14 and 19(1)(g).
76.7 Negativing the contentions of the? petitioner, the Honble High Court held as follows :-
27. The Legislature did not contemplate the grant of a set-off?without any tax being received into the Government Treasury. The grant of set-off without receipt of tax into the treasury would result in a loss of revenue, a consequence which the provision of set-off does not contemplate.
.
29.?A set-off constitutes a concession granted by the Legislature. In the absence of a set-off under section 48(5), the selling dealer would be liable under the charging provision of MVAT Act, 2002 to pay tax on the sale consideration. There is no independent right to a set-off apart from section 48. The entitlement to a set-off is created by the taxing statute and the terms on which a set-off is granted by the legislation must be strictly observed.
.
42.?..Moreover, the concept of a set-off presupposes that tax has been paid in respect of the goods in respect of which a set-off is claimed. To allow a set-off though the tax has not been paid actually would be to defeat the legitimate interests of the Revenue. Hence, in the overall statutory scheme of section 48, sub-section (5) has a rational basis and foundation...
In granting a set-off, the Legislature can impose conditions and that imposed in section 48(5) is not lacking in rationality. Moreover, the scheme of set-off in section 48 has to be read in its entirety and as one cohesive whole. The Legislature cannot be compelled to grant set-off, ignoring the conditions which it imposes. The conditions are not severable and are part of one integrated scheme. 76.8 The object? and purpose of set-off in the VAT Act and the concept of Cenvat credit in the Central Excise Act and the Rules are identical, that is, to reduce the cascading effect of taxes. Similarly the conditions imposed for availing set-off under Section 48(5) of the MVAT act, closely follows the conditions imposed in sub-rules (2), (3) and (4) of Rule 7 of the Cenvat Credit Rules, 2002 and similar provisions in the Central Excise Rules, 1944, Cenvat Credit Rules, 2001 and Cenvat Credit Rules, 2004, as they stood at the relevant time. Therefore, the ratio decidendi of the above judgment of the Honble High Court of Bombay, which is also the jurisdictional High Court for this Bench of the Tribunal, needs to be scrupulously followed. Accordingly, I hold that the appellants herein have not made any case for their eligibility to Cenvat credit on the parallel/duplicate invoices received from the dealers.
77. The last issue? that needs to be considered by me relates to application of time-bar in the instant case. The appellants have contended that they cannot be held responsible for the fraud committed by the dealer and, therefore, extended period of time cannot be invoked for reversal of Cenvat credit taken by them. They have relied upon a number of decisions in this regard. It is also their contention that so long as they have paid for the scrap which they have purchased, no fraud can be attributed to them. This contention of the appellants is completely misplaced. When the department has adduced evidence to the effect that documents on the strength of which credit has been taken are fake/bogus, that allegation has to be effectively and successfully countered as the onus is on the person who is availing the credit to prove that he is eligible for the credit. In none of the cases, the appellants have shown any proof of receipt of the material supplied by the dealer. The primary evidence of receipt of goods is the consignees copy of the transport document and the corroborative evidence would be the gate register/material inward register which shows the entry of the vehicles carrying the goods into the factory premises of the appellants. The appellants have not submitted any such proof or maintained any such records showing the receipt of the materials. In a few cases there is a clear admission that the documents on the strength of which credit was availed was not accompanying the goods said to have been received but were received separately. So long as the appellants have not discharged the onus cast on them about the receipt of the materials, the presumption that they have not received the materials remain valid and irrebuttable. In such a situation, the only reasonable inference that can be drawn is that they are also a party to the fraud committed by the dealers. This Tribunal in the case of AIA Engineering Pvt. Ltd. v. Commissioner of Central Excise, Ahmedabad-II - 2006 (195) E.L.T. 154 held that where credit has been availed without actually receiving any duty paid inputs and the same has been corroborated by the statement of dealers, extended period of time is rightly invocable. Revenue has also relied on the decision of the Honble Apex Court in the case of Commissioner of Customs (Preventive) v. Aafloat Textiles (I) Pvt. Ltd. - 2009 (235) E.L.T. 587 (S.C.). In the case before me, the transaction undertaken by the appellant is a fraud committed on the exchequer in connivance with the dealer. Without receiving duty-paid goods, the appellants availed Cenvat credit on the basis of invoices which covered altogether different goods and in many cases the invoices did not accompany the goods and were received separately. These facts were known to the appellants. Yet they connived with the dealer in defrauding the exchequer by claiming cenvat credit on bogus/fake documents. The Honble Apex Court in the case of Aafloat Textiles (I) Pvt. Ltd. (cited supra), in Para 11 thereof, has held as follows :
11. Fraud as is well known vitiates every solemn act. Fraud and?justice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations, which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equitable doctrine including res judicata. (See Ram Chandra Singh v. Savitri Devi and Ors. [2003 (8) SCC 319]. 77.1 What is involved in the present? case is fraud or collusion or a conspiracy to deprive the exchequer of its legitimate dues and to avail ineligible Cenvat credit. In such a situation, extended period of time is rightly invocable and, therefore, I hold that the demand for CENVAT credit wrongly taken invoking the extended period of time is sustainable in law. 6.3 We have gone through the above judgment and we find that the said judgment is squarely applicable to the facts of the present case as the investigation in the present case was started consequent to the investigation against SSMIPL by the jurisdictional Commissioner. We also note that there are some minor differences which have been highlighted by the learned counsels for the appellants. We have given considerable thought to those differences but in our view, those minor differences will not make any difference in the conclusion. In fact we also note that in the present case, the appellant is a very well established company and producers of various steel and alloy steel items and, therefore, they would have far better knowledge about different types of scrap and it also appears that they are placing the order with certain gradation of scrap such as grade I, grade II etc. On receipt of scrap, gradations were analysed and indicated. We note that in respect of the invoices under discussion, none of the standard operating procedures made by the appellant themselves was followed. This itself indicates that there was a tactical support from some people within the organization. There is no explanation whatsoever from the appellants side why the operating procedures prescribed by themselves were not being followed in these cases. We also note that under Rule 7 of the Cenvat Credit Rules, the main appellant is required to take reasonable steps to ensure that the inputs received by them are duty paid. In the present case, the appellant has placed the order with appellant No. 3,4 & 5 but receiving the cenvatable invoices from SSMIPL and these invoices were for ship breaking scrap and this should have definitely aroused the curiosity about the quality of the scrap. The fact that this crucial factor was ignored by the main appellant leads us to the conclusion that there was tactical approval from their side to receive the non-duty paid scrap and receive first stage dealer invoices of duty paid goods.
7. We also note that it is strange that the appellant has placed order to the three dealers of scrap but all the three dealers of scrap in turn got the invoices of SSMIPL. There are evidences that none of the goods have moved from the godown of SSMIPL and on the contrary there are evidences that the goods have moved from godown of such dealers. Further, while the excise invoices were raised by SSMIPL, the commercial invoices were raised by three dealers or appellant No.3,4 & 5. The main appellant was making payment to appellant No.3,4 & 5 and not to SSMIPL. Even after the issue of the show cause notice, the least that was expected was that the main appellant or appellant No.3,4 & 5 could have produced transporter and the drivers to prove that the goods have moved from the godown of SSMIPL and not from any other place. This has not been done for obvious reason as the goods have not moved from the godown of SSMIPL but from various other places.
8. Keeping in view the overall circumstances of the case, we have absolutely no hesitation in holding that the goods covered by the invoices of SSMIPL have never moved to the main appellants factory and some other goods have moved. The appellant cannot take the credit of the duty paid shown in such invoices. It is also strange that how the main appellant has accepted the invoice of SSMIPL with whom they did not have direct dealing in these cases.
9. As far as appellant No.2 is concerned, he was the overall in charge for procurement of material and he was aware that the invoices are coming from SSMIPL, even though they have placed the order to other three dealers. In our view, the whole thing could have not got through without his tactical support for the wrongs.
10. Similarly, appellant No.3,4 & 5 have aided and abetted in this fraud leading to evasion of duty. The appellants counsel has quoted that no penalty can be imposed under Rule 26. We find that the Honble High Court of Punjab & Haryana in the case of Vee Kay Enterprises vs. CCE reported in 2011 (266) ELT 436 (P&H) has observed as under:-
6. Alternatively,? it was submitted even if the appellant was liable to pay duty it did not stand on the same footing as person who wrongly availed of the credit and doctrine of proportionality was required to be applied by taking into account the extent of culpability. In this regard reliance has been placed on order of this Court dated 5-7-2010 in CEA No. 125 of 2010, Commissioner of Central Excise, Chandigarh-I v. M/s. Lalit Steel and Agro Industries making distinction in the matter of quantum of penalty between person who wrongly availed of the cenvat credit and the person who merely issued invoice on the basis of which cenvat credit was wrongly availed. To consider the rival submissions, we may refer to the relevant rules which are as under :-
Rule 25-Confiscation and Penalty (1) Subject to the provisions of Section 11AC of the Act, if any producer, manufacturer, registered person or a warehouse or a registered dealer;-
(a) remove any exciseable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or
(b) does not account for any exciseable goods produced or manufactured or stored by him; or
(c) engages in the manufacture, production or storage or any exciseable goods without having applied for the registration certificate required under section 6 of the Act; or
(d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the exciseable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [rupees two thousand] whichever is greater.
(2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice. Rule 26 :- Penalty for certain offences :
(1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or [two thousand rupees], whichever is greater.
(2) Any person, who issues-
(i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or
(ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of CENVAT Credit under the CENVAT Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater.
7. Learned counsel? for the revenue supported the impugned order.
8. Question for? consideration is whether penalty could be levied on the person who did not actually deliver the goods and merely issued a fake invoice which enabled wrong availing of cenvat credit and the extent of penalty which could be levied.
9. As regards? applicability of provisions introduced on 1-3-2007 to alleged acts committed prior to the said date, the matter is covered by orders of this Court referred to above which are not shown to be distinguishable. Accordingly, we hold that the amended provisions will not apply to the acts committed prior thereto.
10. In spite of? non-applicability of Rule 26(2), penalty could be levied as the appellant was concerned in selling or dealing with the goods which were liable to confiscation inasmuch as the appellant claimed to have sold the goods in respect of which the cenvat credit was taken. In such a case, Rule 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged. We are, thus, unable to hold that appellant was not liable to pay any penalty. This conclusion is further supported by the judgment of the Honble High Court of Gujarat in the case of Sanjay Vimalbhai Deora vs. CESTAT reported in 2014 (306) ELT 533 (Guj.), which has been affirmed by the Honble Supreme Court vide 2014 (309) ELT A131 (SC). In the said judgment, the Honble High Court has held that a person would render himself liable for penalty for indulging in activities mentioned in Rule 26 of the Central Excise Rules, 2002, even if goods are not confiscated or have not been rendered liable for confiscation.
10.1 In the present case, undoubtedly, appellant No.2,3,4 & 5 were concerned with the scrap actually sent and the invoices of ship breaking scrap which was never sent to the appellants factory.
10.2 In view of the above judgments, we are of the considered view that penalty on appellant No.2,3,4 & 5 have been correctly imposed. However, we find that the penalty imposed on appellant No.2 is Rs.30,00,000/-. We feel the said penalty is on the higher side and reduce the same to Rs.10,00,000/- (Rupees ten lakhs only). As far as appellant No.3,4 & 5 are concerned, the penalty is not on the higher side.
11. The learned counsel for the appellants has quoted the judgment of the Honble Allahabad High Court in the case of CCE vs. Juhi Alloys Ltd. reported in 2014 (302) ELT 487 (All.). We have gone through the said judgment. The facts of that case are very different. In the present case, the scrap received by the main appellant is not ship breaking scrap. The orders were placed with appellant No. 3,4 & 5 who only raised commercial invoices and cenvatable invoices were received SSMIPL. Further, investigation indicates that no goods have moved from SSMIPL to the appellants unit. On the contrary, goods have moved from some other scrap sources like the godown of the appellants to the factory of the main appellant. The facts of the present case are, therefore, very different.
11.1 Similarly, the case of CCE vs. Shakti Roll Cold Strips Pvt. Ltd. reported in 2008 (87) RLT 793 (P&H) is different as in that case the transporter was not traceable. In the present case the investigation has proved beyond doubt that the ship breaking scrap covered by the first stage dealers invoices was received by the main appellant.
11.2 Similar is the position in respect of the judgment of the Honble Punjab & Haryana High Court in the case of CCE vs. Neepaz Steel Ltd. reported in 2008 (230) ELT 218 (P&H).
12. Both sides have quoted large number of judgments. We have gone through the said judgments. The facts and circumstances of the present case are not the same in those judgments and, therefore, those judgments are distinguishable and not applicable to the present case and we do not consider it necessary to discuss each one of them.
13. All the appeals are dismissed except the modification of the quantum of penalty in respect of appellant No.2.
(Pronounced in Court on 6.7.2015) (S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical) tvu 1 47