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2014 (9) TMI 736 - CESTAT NEW DELHICENVAT Credit - excessive credit passed by the dealer - Whether a dealer could have passed on higher credit @ 12% when credit was available only @8% - Held that:- It is admitted by Commissioner (Appeals) in his order that wrongful higher credit has been availed by M/s ABS Steels Ltd. Bhilai. Duty Paid by SAIL was 8%, however, credit passed by M/s ABS Steel was 12%. Acting as dealer and clearing inputs as such, they could not have passed on credit at 12%. This is basic principle of law unless specified otherwise. Once it is evident, excess passing of credit is unlawful manifesting intent to cause subterfuge to revenue. Case laws referred by revenue also amplify the position. Commissioner (Appeals) despite accepting the facts on record, has tried to justify passing on higher credit by the respondents on a ground which is totally unlawful and flimsy. Further it is also evident that respondent i.e. M/s D.M. Engineering (Respondent No. 2) have not taken adequate steps to ensure that no extra credit is availed. Fraud prevention steps are inbuilt in Rule 7 (2) of Cenvat credit Rules 2002. Small effort at their level would have clearly brought out that original material has suffered duty @8% but credit has been passed on @12%. It is clearly established that M/s D.M. Engineering Ltd. (Respondent No. 2) has passed extra amount of credit by manipulating entries in record. Through credit @ 8% was availed, however credit @ 12% has been passed by way of illegal means. Fraudulent intent is clearly manifested. Reversal of excess credit is justified as claimed by revenue. Of course, invocation of penal action is also justified. - Decided against Revenue.
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