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2021 (4) TMI 77 - HC - Central ExciseCENVAT Credit - duty paying documents - petitioner had availed ineligible credit of service tax paid on certain input services on the strength of documents not covered under Rule 9(2) of the CENVAT Credit Rules, 2004 - presence of Fraud or not - scope of SCN - HELD THAT:- The fraud has serious civil as well as criminal consequences. To constitute the offence of fraud there must be intent to deceive. That apart, a finding of fraud is a stigma which is a reflection on the integrity of a person or of a corporate entity. The basic allegation against the petitioner pertaining to availing of CENVAT credit on account of labour services as could be discerned from the notice to show cause-cum-demand dated 23.12.2015 was that the services for which the CENVAT credit was availed of was not connected with the manufacturing activities of the petitioner. Therefore, such claim was held to be inadmissible - petitioner’s availment of CENVAT credit was being denied by the adjudicating authority on merit and not on the ground that the invoices were manufactured or manipulated. While there cannot be any two opinion that fraud vitiates everything and should be strongly dealt with particularly in a judicial or a quasi-judicial proceeding, Supreme Court in HARJAS RAI MAKHIJA (D) THR. L. RS. VERSUS PUSHPARANI JAIN AND ORS. [2017 (1) TMI 1736 - SUPREME COURT] had sounded a note of caution. Firstly, there must be a specific allegation of fraud being played by a party to the proceeding. When such an allegation is made, it must be enquired into. The party against whom the allegation of fraud is made has to be put on notice and heard. Evidence must be led wherefrom a conclusion can be drawn that there was intent to deceive by the party who is alleged to have committed fraud - CESTAT was not justified in rejecting the application filed by the petitioner for recalling the finding of fraud and additionally in imposing cost. Petition allowed.
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