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2019 (1) TMI 1727 - Commission - Central ExciseMaintainability of settlement agreement - Recovery of wrongly availed CENVAT credit - fake invoices - allegation that CENVAT credit availed on the basis of fraudulent invoices and without actual receipt of goods - issuance of fraudulent invoices and fake Lorry Receipts without delivery of the goods - HELD THAT:- Essentially, the instant case is a case of availment of Cenvat credit and reversal thereof on paper only, without receipt of goods. Though in their application, the applicant has accepted that the credit was availed wrongly as alleged in the SCN, but they have not accepted any amount of the duty demand (as made in the SCN), nor any interest. They contend that the wrong credit was reversed on the same day/month on issuance of invoices, so there is neither any duty nor interest payable. During the hearing, the Ld. Consultant fairly submitted that these are only paper transactions to inflate the business turnover. At the outset, the Bench finds that there are pertinent issues of maintainability of the present application. Since the entire case is a case of availment of Cenvat credit on paper without clearance, movement (transportation) and receipt of inputs; and reversal thereof to inflate business turnover (as fairly submitted by the Ld. Consultant during the hearing), the present case does not appear to be a bona fide case for settlement as envisaged under the law; particularly, Section 32E and ‘case’ as defined under Section 31(c) of the Central Excise Act, 1944. Without expressing any opinion on the legal validity or otherwise of the duty demanded in the said SCN, the Bench finds that the applicant, by contesting the duty demanded in the SCN in entirety and not accepting any of it, does not meet the eligibility criterion of settlement as set out in Section 32E of the CEA, 1944. What the applicant has been seeking in fact is the validation of their action as it existed prior to issuance of the SCN, which to our mind is legally outside the ambit of settlement as provided in law. On merits, they have been challenging the entire duty demand under the SCN. Even for arguments sake, accepting the plea of the applicant that SCN demanding duty in this case [is] not valid and if we hold so, it would in effect negate the mandate of sub-para (b) of Section 32E as above. Thus, the application is not maintainable under the law, as it fails to meet the eligibility criterion under Section 32E ibid. The applications filed by the applicant M/s. Pet Metals Pvt. Ltd. and the Co-applicant Shri Amit Singla are rejected as not maintainable - It is clarified that the rejection of these applications is, without prejudice to any other action that may be taken against the applicants under any other law for the time being in force.
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