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2013 (10) TMI 491 - AT - Central ExciseMODVAT/Cenvat credit – issue of invoice without supply of material - Penalty - Held that:- The statement of the authorized representative of Khemka reveals that with the loss of business in the year 2002, they entered into an arrangement with the first stage dealer for issuing invoices without the supply of goods so as to reflect some sale purchase books on accounts - the disputed period in the present appeal is February and March 2004. Rule 7(2) of Cenvat credit rule requires the recipient of the inputs to know the identity of the supplier of the goods, was second stage dealer, the rule stand satisfied by the manufacturer with Shri Amit Kumar proprietor of second stage dealer having deposed that they had in fact supplied to the manufacturer, payment for which were made by them in cheque. Recipient of the inputs is expected to know his immediate supplier and there is no further requirement to find out as to from where his supplier has procured the inputs - the confirmation of demand of duty and imposition of penalty on M/s. Faridabad Autocomp Systems and Super Trading Company set aside - the imposition of penalty of M/s. Ayushi Steels Company, even if the Revenue's case is accepted that they dealt only with the invoices without actually dealing with the goods even then no penalty can be imposed upon them inasmuch as the provision for imposition of penalty on the dealers were introduced vide Notification No.8/2007 CE (NT) - the period for the present case is prior to the date, the penalty imposed upon M/s. Ayushi Steels Company Pvt. Ltd. also set aside – Decided in favour of Assessee.
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