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2015 (11) TMI 373 - AT - Central ExciseAvailment of fraudulent CENVAT Credit - Bogus invoices - Non receipt of physical goods - the case of the Revenue is that the main appellant has purchased/procured duty paid invoices of Jindals and credit of duty paid indicated in such invoices was taken without receiving the HR trimmings covered by the said invoices and the HR trimmings covered by the said invoices were diverted to Viramgam and nearby areas and there HR trimmings were used by hundreds of small scale units manufacturing nails etc - Imposition of penalty. Held that:- Invoices are pertaining to HR trimmings. During the investigation, the main appellant and their officials including appellant No.2 were specifically asked whether they have any evidence whatsoever to prove that the goods viz. HR trimmings covered by the said invoices were transported to their factory and received in their factory. The appellants could not produce copy of the Gate register, goods receipt note or LR or even any document evidencing payment of freight charges to the driver/transporter in respect of each invoice (whether paid in cash or by any other means). It is a common knowledge that the persons who are familiar with the excise laws and are aware about the violations of excise law, they are indulging in them they do not disclose proper and true facts at the first instance and they tend to give at times misleading explanations. In the present case also, generally the co-noticees have said in the statements after assessing the information already available with the investigating officers. In the later statements when they were shown more details, they came out with correct facts. - Since the invoices of such HR trimmings were of no use to them, they were trading the invoices through brokers based in Mumbai who in turn were locating the furnace units who could fraudulently avail the credit based on such invoices. The cash amount of HR trimmings being sent through angadia or other services from Viramgam and nearby area and were being converted into Bank Draft etc. through banking channels either by such brokers or by manufacturers of ingots or was used in cash to purchase bazaari scrap/scavenger scrap. In view of the above position, we have no hesitation in holding that the demand and penalty imposed on the main appellant is correct and the appeal of the main appellant is, therefore, dismissed. HR trimmings in the coil form is very distinct commodity compared to the bazaari/scavenger scrap and if they were receiving invoices for the HR trimmings, there was no reason for them to accept the bazaari scrap. In any case, HR trimmings is more expensive than bazaari/scavenger scrap. We, therefore, hold that the penalty imposed on him under Rule 13 of the Cenvat Credit Rules, 2002 is in order and the quantum of penalty imposed is also not on the higher side. Penalty imposed on Appellant 6 & 7 is sustained - Decided partly in favour of assessee.
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