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2006 (12) TMI 408 - AT - Central ExciseCenvat/Modvat - Duty paying documents - Penalty imposed - HELD THAT:- As a manufacturer who has taken the credit he is required to know the supplier of raw materials and not merely their merchant manufacturer. It is like a buyer of stolen goods cannot claim ownership of the goods even if he has purchased without knowledge. If he has purchased the stolen goods with the knowledge that they are stolen, then he is liable, in addition, to penal action. Anyway, the appellant, in this case, has taken an undertaking from the merchant manufacturer to compensate him, in the event of credit being found not eligible. Whether this was done out of abundant precaution or out of knowledge is not clear. In this regard benefit of doubt naturally goes to the appellant manufacturer. Thus, hold that - (a) the invoices raised by M/s. Muskan Prints is not valid for the purpose of taking credit by the appellant; (b) the appellant is required to pay the duty and interest as demanded by the original authority and as upheld by the Commissioner (Appeals); (c) the penalty is not sustainable. The appeal is disposed off on the above terms.
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