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2017 (4) TMI 1325 - CESTAT ALLAHABADCENVAT credit - fake invoices - Clandestine removal - shortage of 45.102 MT of final product - penalty - whether the CESTAT was justified in law in rejecting the appeal filed by the Appellant/ Revenue against the Respondent/ Assessee, who availed CENVAT credit on the basis of invoices issued by M/s M. K. Steels Pvt. Ltd., Kolkata as sequel to an enquiry and fake nature of the said invoices was proved and M/s Sarala Ispat (P) Ltd., Durgapur, who were mentioned to be the manufacturer of goods in the said invoices was found to be non-existent? - Rules 3, 9(3) & 7 of the Cenvat Credit Rules, 2004. Held that: - it is not disputed by the Revenue that appellant, M/s JRW did receive the inputs. What is disputed is that the invoices, accompanying the inputs and the Cenvat showed therein is doubtful and/or fraudulent. Appellant, M/s JRW have also lead evidence of usage of road permits i.e. for transportation of goods. The road permits are pre-authenticated documents issued by the Trade Tax Department and appellant is required to keep proper records of their usage. The appellant also filed copy of road permit issued by M/s KE to -M/s M. K. Steels Pvt. Ltd for transport of MS Ingots in question. Further, the appellants have lead evidence that payment for the purchase of input was made by cheque - the appeal filed by M/S JRW and its Authorized Signatory, Harpinder Singh is allowed. Facts are similar to the case of Commissioner of Customs, Central Excise & Service Tax Versus Juhi Alloys Ltd. [2014 (1) TMI 1475 - ALLAHABAD HIGH COURT], where it was held that The goods were demonstrated to have travelled to the premises of the assessee under the cover of Form 31 issued by the Trade Tax Department, and the ledger account as well as the statutory records establish the receipt of the goods. In such a situation, it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. Penalty on Mr. Neeraj Agarwal & Authorized Signatory - M/s Kartikey Enterprises - Held that: - they have been party to the fraud in passing the illegitimate Cenvat credit in collusion with the said Mr. Mukesh Agarwal and the three trading firms, namely; M/s M. K. Steels, M/s U.K. Ispat & M/s Shree Hanuman Trading Company. All these three traders had their business premises, at Kolkata/Howrah - penalties confirmed. Appeal allowed in part.
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