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2018 (3) TMI 497 - AT - Central ExcisePenalty - appellant were not having any manufacturing premises and had obtained registration with the sole purpose of enabling to issue ARE-1 for the purpose of claiming rebate by others - CENVAT credit - Held that: - it is an admitted position that all the persons involved were aware that there was no manufacture taking place at the premises of M/s Sofina Fashion. Not duty was being paid and no goods were cleared from M/s Sofina Fashion. Documents were being generated to show payment of duty with the intention of claiming fraudulent rebates. The main beneficiary of the entire fraudulent were three exporting firms namely, M/s Karishma Overseas, M/s Krishna Exports and M/s Sheetal Exports, and M/s Sofina Fashion was used as a tool for these purposes - plea of leniency to the three exporters does not merit consideration and the same is rejected. Reversal of CENVAT Credit from M/s Sofina Fashion - Held that: - even the show-cause notice clearly mentioned that there was no movement of any goods to or from registered premises of M/s Sofina Fashion. There was no generation and/or maintenance of any documents for M/s Sofina Fashion except ARE-1. Therefore, there was no operation and maintenance of CENVAT account by M/s Sofina Fashion at any stage - the charge of availing or utilizing credit by M/s Sofina Fashion on the ground that they had generated fraudulent ARE-1 cannot be upheld. Penalty on M/s Sofina Fashion under Rule 15(2) of CENVAT Credit Rules, 2002 - Held that: - in absence of any wrong availemnt or utilization of CENVAT Credit, penalty under Rule 15(2) of the CENVAT Credit Rules, 2002 cannot be imposed. Appeal allowed in part.
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