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Per S.N. Jha:

Per: Justice S.N. Jha This appeal by the assessee is directed against the Order-in-Appeal of the Commissioner (Appeals), Central Excise, Chandigarh dated 29.11.2004 dismissing the appellants appeal alongwith other appeals by various parties and upholding the Order-in-Original of the Deputy Commissioner dated 31.01.2006. By the said order, the Deputy Commissioner disallowed ccenvat/modvat credit of Rs. 55,062/- under Rule 11AH of the Central Excise Rules, 1944 read with Section 11A of the Central Excise Act directing its reversal with interest under section 11AB of the Act. Penalty of equal amount i.e. Rs. 55,062/- was also imposed under section 11AC of the Act read with Rule 57AH and Rule 173Q of the 1944 Rules.

2. The appellant are engaged in the manufacture of Non Alloy Steel Ingots falling under Chapter 72 of the Schedule to Central Excise Tariff Act. Brief facts of the case are that M/s Tata Iron & Steel Company Limited (TISCO) has a stockyard at Mandigobindgarh in the State of Punjab where they deal in various items of iron and steel viz tandish jam, pooled iron, bloom butt clear, hot strip mill, HSM coil box CO, rejected scrap ingot etc. The said stockyard is separately registered under Central Excise Act/ Rules. TISCO appointed M/s Adhunik Steels Limited, Mandigobindgarh as consignment agent. M/s Neepaj Steels (India) at Mandogobindgarh also deals in iron and steel goods. Acting on information that modvat /cenvat credit was being fraudulently passed on and taken on the basis of fictitious transportation of goods from TISCO, Mandigobindgarh, the preventive staff of the Central Excise Department visited the said premises of TISCO at Amloh Road, Mandigobindgarh on 16.5.2001. After resuming the sale invoices of the company for the financial year 2000-01, the verification of the vehicles supposedly used for transporting the goods was got made. Verification revealed that a large number of vehicles were in fact light motor vehicle such as scooters, mopeds, motor cycles, combines, jeeps, tractors, cars etc. on which transportation of huge quantities of iron and steel was not possible. Steps were taken to get further verification from various Central Excise formations and the concerned registering authorities. On 29.08.2001, the excise officials again visited the registered premises of TISCO at Mandigobindgarh and resumed sale invoices for the period 1996-97 to 1999-2000 and 2001-2002. Further, lists of vehicles shown to have been used for transporting goods during the previous five years was prepared and sent to various Central Excise formations in ten states for verification of the vehicles from the concerned registering authorities. Verification reports received from different places revealed the same story of so-called transportation of goods by vehicle like scooters, motor cycles, mopeds, combines, jeeps etc. which are incapable of carrying huge quantities of iron and steel items mentioned in the relevant invoices. In some cases the registration nos. had not even been issued by the concerned transport authorities. In some cases, the same vehicle was shown to have been used a number of times. The verification thus indicated that there was no actual transport of the goods and the transactions were mere paper transactions to facilitate fraudulent availment of inadmissible modvat/ cenvat credit.

9. At the outset we may observe that the question as to whether there can be transport of large quantities of iron steel items by light motor vehicles, like scooter, moped, jeep, car, tractor, tanker etc. can hardly be said to be an issue. There cannot be any dispute that for claiming modvat/ cenvat credit there must be actual receipt of the goods and where the goods are alleged or shown to have been transported by vehicles which turn out to be really scooter, moped, car etc., the inference would be irresistible that there was no actual transportation or receipt of the goods and, therefore, modvat/ cenvat credit will not be available to the party. The question as to whether modvat/ cenvat credit can be claimed with respect to fictitious transportation or receipt of goods can hardly be called an issue to warrant any adjudication or decision. If any issue is involved, it is an issue of fact whether the vehicles in question are indeed light motor vehicles like scooter, moped, car etc or they are transport vehicles like truck. Depending on the determination of this issue the modvat/ cenvat credit can be allowed to the party subject to fulfilment and compliance of other requirements of law. In this view of the matter, one option available to us was to send the case back to the Single Member Bench for final disposal. But being prima-facie of the view that the decisions of the Single Member Benches referred to in the reference order  that credit cannot be denied merely on the ground that the vehicles mentioned in the concerned invoices are fictitious, was not correct  bordering on perversity, we decided to hear the appeal finally drawing support from the decision of the Division Bench in M/s Viraj Alloys Limited (supra).

Thus, there is no merit in these appeals as no question of law, much less substantial, arises from the order of the Tribunal wherein pure findings of fact have been recorded in favour of the respondents.

11. It goes without saying that in any series of transactions some may be genuine for which the benefits available in law may be allowed to the party, for other transactions in the same series, similar benefit may not be allowed  depending on the attending facts in particular cases. In other words, cenvat /modvat credit can be allowed where there is actual transportation and receipt of goods by the manufacturer entitling them to take cenvat credit, but where there is no such proof of actual transportation and receipt, credit cannot be allowed. Surely, it would be too wide to suggest that all transactions made by M/s Adhunik Steels Limited involving M/s Neepaz Steels ((India) and others were fictitious. Each of such transaction has to be considered as separate and independent. The appellant therefore cannot contend that in view of the judgement of the Punjab and Haryana High Court  which was rendered between the same parties in the context of seemingly similar transactions, taking modvat/ cenvat credit by the appellant in the present case too was legal and they cannot be asked to reverse the same and demand cannot be made against them. As a matter of fact, for this reason alone, the issue involved in the appeal being an issue of fact  resulting in inevitable consequence of allowing or disallowing cenvat credit  depending on the outcome of the issue, we proceed to consider on the merit of the case as an independent case notwithstanding favourable decisions in so called similar cases by Single Member Benches. As observed above, at the cost of repetition, if the vehicles in question were really light motor vehicles  incapable of carrying large quantities of steel and iron items, conclusion would be inevitable that there was no actual transportation or receipt of the goods and, therefore, the appellant could not have taken cenvat credit on them  as held by the Division Bench in Viraj Alloys Limited (supra).