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2016 (1) TMI 60 - AT - Central ExciseDenial of CENVAT Credit - Fraudulent credit - credit on invoices without actual receipt of goods - Held that:- Appellants company neither received the inputs nor cleared final products and the entire transactions were only on paper with an intention to pass on irregular modvat credit to their buyers. We find in the present case as the transactions are only on paper and as such, the credit availed without receipt of inputs and credit utilization without clearance of final products will only pass on the undue benefit or credit with reference to buyers from respondent for such fictitious clearance of final products who in turn could have availed cenvat credit. In other words, as the appellants admittedly have not manufactured any item relevant to the present case, the question of payment of such duty on final products does not arise. As such, the passover of credit by them to a third party becomes crucial for full compensation of revenue loss due to this illegal acts. In this situation, we find that the credit of duty utilized for purported clearance of final product by the appellants resulting in cenvat credit availment by buyers stands recovered at the buyers end as admitted by both the sides. The appellants in the written submissions submitted that the full amount of cenvat credit in the improper paper transactions stand recovered along with 25% of penalty in pursuance of stay order of the Tribunal. The plea of the appellants is that concessional penalty of 25% should be available to them as the full duty involved (irregular credit) stand recovered - appellants are eligible for reduced penalty of 25% in terms of proviso to section 11 AC - Appeal disposed of.
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