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Central Excise - Case Laws
Showing 21 to 40 of 196 Records
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2014 (6) TMI 858
Recovery of duty from lessee of the tea garden - Default to pay excise duty - power to issue the attachment/detention order for realization of dues - Assessee contends that they were placed in possession of the tea garden much after the period for which the impugned demand was issued and hence no recovery could be made of the alleged outstanding central excise dues from them (lessee) and nor the tea manufactured by them from the tea garden/factory could be attached/detained - Held that:- The petitioners then in their written submission contended that on the basis of interim order passed in the case the amount mentioned in the demand has been recovered by the Department and hence it cannot be now recovered from any of the petitioners and specially from the petitioner of WP(C) No.3049/2006 i.e. defaulting assessee. If that is the argument, then it is for the petitioner to satisfy the authorities that how, when and in what manner they or any of the writ petitioners satisfied the impugned demand or/and how, when and in what manner, the authorities recovered the entire dues from any of the writ petitioners. In this bunch of petitions, no documents have been filed to show that impugned demand has already been satisfied and if so, in what manner.
Neither the petition filed by the defaulting assessee and nor the ones filed by the alleged lessees of defaulting assessee has any merit. - liberty is granted to writ petitioners to file conclusive proof before the competent recovering authorities to show that the petitioners have satisfied the impugned demand and made payment of ₹ 18,64,243. - Decided against the petitioners.
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2014 (6) TMI 857
Denial of rebate claim - recovery of erroneously sanctioned rebate - contradictory statement of transporters - Cross examination opportunity not given - Held that:- Government of India has issued Notification No. 21/ 2004-C.E. (N.T.) dated 06.09.2004 for grant of rebate of central excise duty paid on materials used in the manufacture of export goods. The essential requirements of the notification for claiming rebate are that the duty paid materials, purchased directly from the material manufacturers or from registered dealers, are actually received by the manufacturer of export goods; that the same are actually used in the manufacture of export goods; and that the export goods so manufactured are actually exported.
After the Revenue started its investigations regarding alleged fraudulent rebate claims by the main appellant, the Maharashtra Value Added Tax authorities obtained copies of various documents from the Central Excise Department on the issue and commenced independent investigations from VAT angle. During this investigation the statements of the transporters were recorded by Maharashtra Sales Tax Authorities in their own language ‘Hindi’, which indicate that the inputs in fact have been transported and delivered to the factory of main appellant or to its two job workers at Vasai, which contradict the statements recorded by DGCEI in English.
The two set of statements of the same persons on the same issue of transportation of inputs by two investigating authorities are contradictory to each other. The report of MVAT authorities also revealed that the two job workers of the main appellant have very large manufacturing capacity & have huge machinery for manufacture, and had incurred huge electricity expenditure. We note that the copy of the said MVAT Report was not properly appreciated by the adjudicating authority. We also find that the adjudicating authority has nowhere tried to verify from the records of the Deputy/ Assistant Commissioner having jurisdiction over the factory of the main appellant to know whether any additional intimations have been filed mentioning the names and addresses of more job workers.
Order passed by the adjudicating authority is set-aside and matter is remanded back to the adjudicating authority for deciding the same afresh after affording the appellants an opportunity to explain their case and after allowing the appellants cross-examination of those persons whose statements are relied upon - Decided in favour of assessee.
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2014 (6) TMI 856
Waiver of pre deposit of duty - manufacture - marketability - whether various processes/activities involved in placing the rechargeable battery and battery charger in blister pack by the Applicant would result into manufacture of an excisable goods within the meaning of Section 2(f) of CEA, 1944. - Penalty u/s 11AC - clandestine manufacture and removal of excisable goods - Held that:- Prima facie analysis of the facts disclose that the principal activity/processes carried out by the applicant are in the nature of packing and branding and at this stage it is difficult to say that such processes would fall under the scope of the definition of manufacture in absence of a Chapter Note or Section Note.
The judgments cited by the Ld. Special Counsel on the relevance of marketability in ascertaining whether the present resultant product after packing becomes an excisable product or otherwise, in our opinion, are out of place. In the said judgments the issue involved was whether an intermediate product emerges during the course of manufacture of final products be dutiable, thus necessitating the test of the product's marketability. The judgment of Flex Engg's case [2012 (1) TMI 17 - Supreme Court of India] is also not relevant to the facts in hand as in the said case the issue was whether CENVAT Credit would be admissible in the premises of the assessee on the machines, as the process of testing carried out in the said premises be called as a process of manufacture.
Besides, applicant had discharged the service tax on the said process with effect from July, 2010, and they exercised their option under Voluntary Compliance Encouragement Scheme, 2013 (VCES) for the period from October, 2007 to June, 2010. In these premises, we are of the view that the Applicant could able to make out a prima facie case for total waiver of pre deposit of dues adjudged, accordingly, all dues adjudged is waived and its recovery stayed during the pendency of the appeal - Stay granted.
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2014 (6) TMI 855
Interest demand - Valuation of goods - cost of the free issue materials were not included in the value of finished goods - Demand of differential duty - whether interest under Section 11AB of CEA, 1944 is attracted on account of the major portion of differential duty paid in July, 2001 and balance in March, 2003 for the clearances effected during July, 1996 to March, 2001 - Held that:- Under sub-section (1) of Sec. 11AA of the Act, as this provision stood at the material time, an assesse who fails to pay the duty determined under sub-section (2) of Section 11AA of the Act, within 3 months from the date of determined of duty is bound to pay interest at the prescribed rate for the period of delay. Sub-section (2) says that sub-section (1) is not applicable where the duty became payable on or after the date on which the Finance Act, 2001 received Presidential assent. It was on 11/5/2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under sub-section (1) of Section 11AA on the amount of duty paid by the assesse for the period upto 10th of May, 2001.
In respect of the amount of duty paid for the period from 11/5/2001, interest on duty is leviable under Section 11AB of the Act in as much as sub-section (1) of Section 11AA opens with the clause subject to the provision of Section 11AB . In the result, interest can be levied on that part of the amount of duty which pertains to the period from 11/5/2001 to 30/6//2001. This liability, obviously, is unaffected by the fact that such duty was paid within the period of 3 months prescribed under Section 11AA (1). It is, therefore, held that the appellant is liable to pay interest under Section 11AB of the Act on that part of the amount of duty which pertains to the period from 11/5/01 to 30/6/01 and such interest shall be paid for the period from the due date to the date of payment - Decided against assessee.
Penalty u/s 11AC - Held that:- Issue of inclusion of value of Moulds supplied free of cost in the value of the finished goods, during the relevant period was unsettled due to conflicting views/decisions on the subject. The said issue got settled only after the Larger Bench decision in the case of Mutual Industries Ltd. (2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI). In view of the judgment in Anil Polymers case (2008 (12) TMI 138 - CESTAT MUMBAI), I find merit in the submission of the Ld. Advocate for the applicant on the issue of allegation suppression and consequent imposition of penalty. Thus, the penalty imposed on the appellant is not sustainable and accordingly, the same is set aside. - Matter remanded back - Decided partly in favour of assessee.
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2014 (6) TMI 854
Valuation of goods - inclusion of inspection charges - Held that:- inspection is being carried out only in respect of sale to M/s. U.P. Jal Nigam. There is no inspection being carried out in respect of sales made to other persons. As such, it can be concluded that such inspection, which was got done from a third party, was on insistence of U.P. Jal Nigam and has got nothing to do with the marketability in the ordinary course. If the same was necessary for marketability of the goods, the same would have been carried out in 100% of the goods manufactured by the assessee. Inasmuch the said inspection is only in respect of sale to one party and inspection charges collected by the appellant from the said party are being paid to the inspecting authorities, we find no justifiable reason to hold that same would be part of the assessable value of the goods - Decided in favour of asessee.
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2014 (6) TMI 853
GAS project - goods cleared from one unit whereas the PAC issued was in the name of appellant’s other unit. - facilities to maintain Butt Weld Fittings - Clearance of certain pipe fittings for the project ‘Neelam Heera Reconstruction Project’ and ‘North Tapti Project’ under Project Authority Certificate (PAC) without payment of duty as per the provisions of Notification No. 6/2006-C.E., dated 1-3-2006 - non-admissibility of exemption under Notification No. 6/2006-C.E. - Held that:- wrong mentioning of address in the PAC was only due to typographical mistake. A procedural mistake cannot be made the basis for denying substantive right when such a manufacturing facility is not available at their Makarpura unit of the appellant. As the details of the same are required to be gone into at the time of final hearing, prima facie appellant has made out a case for complete waiver of the stay. Accordingly, there shall be stay from recovery of confirmed dues and penalties till the disposal of the appeal - Stay granted.
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2014 (6) TMI 852
Appeal before Commission (appeal) - Bar of limitation - Delay in delivery of order - Held that:- Since the delivery of Order-in-Original was made by dispatch through speed post which has already been held to be improper delivery. The date of receipt of the order by the appellant subsequently, as submitted by the learned counsel has to be treated as date of receipt. Since both sides agree that if that is taken into account appeal filed by the appellant before the Commissioner (Appeals) was within time, we consider it appropriate that at this stage itself the impugned order should be set aside and matter remanded to the Commissioner (Appeals) for decision on the stay application as well as appeal in accordance with law - Matter remanded back - Decided in favour of assessee.
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2014 (6) TMI 851
Denial of SSI exemption - Manufacturing in name of other person - Held that:- Investigation result revealed discovery of the fact that the business activities of M/s, Soft Pharmaceuticals was carried out from the premises of the respondent situated at 47-48, Industrial Area, Phase-II, Chandigarh, where Administrative Office of the said office was functioning. Shri M.D. Sharma, Representative of M/s. Soft Pharmaceuticals sits in the administrative office of the respondent. The respondent categorically stated in the statement recorded under Section 14 of the Central Excise Act, 1944 that it had manufactured and sold goods under the brand name 'SOFT Pharmaceuticals' w.e.f. April, 2003. The investigating officers when examined invoices no. 1 dated 1.4.2003 to Invoice no.1524 dated 30.08.2003 along with pamphlets found that product carried out the brand name 'SOFT Pharmaceuticals' and that also carried the logo 'SOFT Pharmaceuticals'.
Although a statement was given that "Soft Pharmaceuticals" was promoter of the product manufactured by the respondent that could not be established by the respondent. The respondent also discharged duty liability upon investigation results and discovery of the materials in the course of investigation - When record reveals aforesaid factual matrix based on evidenced and unlawful benefit was enjoyed by respondent, in absence of rebuttal leading cogent evidence by respondent for 'SOFT Pharmaceuticals' brand belonged to it. Revenue should succeed in its appeal - respondent failed to satisfy condition of SSI benefit manufacturing branded goods of others not proving that the brand name was its own - Decided in favour of Revenue.
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2014 (6) TMI 827
Validity of Tribunal's order - Ex parte order passed - Held that:- On the application for modification of the earlier order, the Tribunal found that it was listed on 17th April 2012. On that date, a written request was filed to list the application on 18th April 2012. Therefore, on the Appellant's written request, the matter was postponed to 18th April 2012. On the postponed date, none appeared on behalf of the Appellant meaning thereby both the Appellant and Advocates were absent. In such circumstances, the Tribunal cannot be faulted for proceeding ex-parte.
Waiver of pre deposit - Clandestine production and removal of goods - Held that:- Prima facie, the Tribunal found that the demand was based on the Appellant's contradictions noted in the books of accounts. The adjudicating authority, prima facie, took into consideration the other material as well. In these circumstances, the Tribunal found that this is not a case of complete waiver of pre-deposit but a partial one. We do not find that the direction to deposit a sum of ₹ 38,00,000/- out of the total demand of ₹ 2,30,36,528/- can be said to be unreasonable, arbitrary, leave alone capricious, enabling us to exercise our jurisdiction. The Appeal does not raise any substantial question of law and it is, accordingly, dismissed - decided against assessee.
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2014 (6) TMI 826
Denial of refund claim - Surrender of registration - Whether refund claim filed by the appellant under Rule 5 of the Cenvat Credit Rules, 2004, after surrender of the registration, is admissible or not - Held that:- First appellate authority has rejected the refund claim of the appellant on the ground that appellant has not produced any evidence to prove that the goods have been exported under bond and the unutilized credit has accumulated due to export under bond. It is observed from the case records that the facts available on records clearly suggest that the goods were supplied to 100% EOU under CT-3 certificates as a result of which Cenvat Credit got accumulated in the records of the appellant. These facts are not disputed by the adjudicating authority and Commissioner (Appeals) has clearly gone beyond the scope of the show cause notice to raise the issue of export of goods is not under bond.
Refund claim can be filed once in a year and it is not obligatory to file periodical refund claims as prescribed under Notification No.5/2006-CE(NT). It is the case of the appellant that refund claim is filed within a period of one year from the relevant date as specified in Explanation (B) of Section 11B of the Central Excise Act, 1944 - As there is no clarity from the rival submissions made by either sides whether refund claim was filed by the appellant within one year or not. This verification can only be done by the adjudicating authority. For getting this verification made, the matter is required to be remanded back to the adjudicating authority - Decided in favour of assessee.
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2014 (6) TMI 825
Confiscation of goods - provisional release of the seized goods in the factory premises - Execution of bank guarantee - Held that:- Finished goods which are ready for dispatch are goods which are meant for export as well as for home clearance. As regards the raw material, we do find that the Commissioner (Appeals) has recorded that most of the raw material is procured against advance licences. Needless to say that when the goods are procured against advance licences, they are secured by way of bond to the Customs authorities. To that extent, Revenue's interest seems to be secured. Even if the raw materials which, according to the Revenue, are unaccounted, the said raw materials having been recorded as stock available with the assessee, can be accounted for, subsequently in records and consumption can be watched. We agree with the view of the ld. Commissioner (Appeals) that the order of releasing the goods on executing the bond backed by a bank guarantee shall not come in the way of investigation which is being carried out by the Department and they may do so. - the bank guarantee should be executed for Rs.20 lakhs. - goods to be released provisionally - Decided conditionally in favour of assessee.
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2014 (6) TMI 824
Remission of duty - loss/destruction of goods on account of a fire occurred in the factory - Held that:- Tribunal has no jurisdiction to hear appeals arising out of the orders of Commissioner (Appeals) where the appeals relate to loss of goods either in transit or in storage as stated in proviso (a) to Section 35B of the Central Excise Act. - Decided against assessee.
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2014 (6) TMI 823
CENVAT Credit - penalty on dealer - Fraudulent premises - Fake transaction - Fake invoices - Held that:- There are no categorical findings against the appellant so as to prove the charges as alleged in the show-cause notice inspite of there being names available of the alleged supplier in the invoices from whom the appellant allegedly purchased, no enquiry appears to have been done. Further, it is seen that the appellant is situated in Mumbai, whereas the invoices recovered from M/s Accelerated Synthetics Pvt. Ltd. allegedly issued by the appellant are printed by one Ambaji Stationery, Surat. No enquiry has been made with the printer as to who got the stationery printed. Further, the appellant had stated that he had obtained the registration under Central Excise on being inspired by one Chandubhai Patel of Surat, who has also admitted in his statement before the Revenue authorities that he had also registered one firm at Surat with the Excise Department in similar name of ‘Shiv Trading Company'.
Chandubhai Patel has been found to be involved in the issue of bogus CENVAT invoices in other names also. It appears that the said Chandubhai Patel has been instrumental in the mischief by using the name of the appellant without his knowledge. Moreover, it is found that the adjudicating authority has imposed penalty without any categorical finding against the appellant. Rather the penalty is imposed on the basis of assumption and presumption which have no legs to stand - Decided in favour of appellant.
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2014 (6) TMI 822
Maintainability of appeal - leviability of interest on the amount of duty paid on the goods lost in transit - recovery of duty on goods lost in transit and interest thereof - Held that:- applicant had preferred a revision application before the Government of India challenging the demand of duty confirmed on the loss of goods in transit and also the levy of interest, confirmed by the lower authorities. The revisionary authority after detailed discussion of all issues raised including levy of interest under Section 11AA and Sec. 11AB, had remanded the matter to the adjudicating authority for the limited purpose of quantifying the interest, under the respective provisions, for the period prior to 11-5-2001 and after 11-5-2001. Pursuant to the said remand order, the adjudicating authority has quantified the interest as Rs. 38,81,792/- for the period prior to 11-5-2001 and Rs. 6,27,339/- for the period after 11-5-2001. We find from the records that the appellant had at no point of time challenged the leviability of interest under Section 11AA or Section 11AB as directed by the revisionary authority, before any other higher forum. The learned advocate for the appellant had submitted that in the present appeal, they are challenging both the quantification as well as leviability of interest. We do not find merit in the said submission of the appellant for the reason that the revisionary authority has discussed in detail the liability to duty as well as interest, on the goods lost in transit, in the revision order and the same, in our view has attained finality. - Appeal not maintainable - Decided against assessee.
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2014 (6) TMI 821
CENVAT Credit - nature of duty paid by the 100% EOU - Revenue has taken a view that entire amount should not have been taken as credit and credit should have been limited to the amount attributable to excise duty(CVD) portion of the total duty paid by 100% EOU - Held that:- According to Section 3 of Central Excise Act 1944, the duty payable by a 100% EOU is excise duty only and the quantum is required to be worked out based on the customs duty leviable on the goods. When the statute itself provides that what is being paid by a 100% EOU is excise duty, the question of denial of benefit of Notification or the CENVAT Credit Rules does not arise. In this view of the matter, we consider that the appellant has made out prima facie case for complete waiver. Accordingly, there shall be complete waiver and stay against recovery of the dues during the pendency of the appeal - Stay granted.
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2014 (6) TMI 820
Duty demand - Penalty - Mis declaration - Suppression of facts - Held that:- Even though the learned advocate argued that non-mention of duty is not mis-declaration, I am unable to agree with this view. Mis-declaration is nothing but making a declaration which is not true. In this case, it is clear that the assessee had mentioned that the amount of duty had been paid which, in fact, had not been paid. Therefore, I agree with the view submitted by learned AR that as far as penalty is concerned, in this case, Rule 25 has been correctly invoked. As regards the liability of Rs. 53,768/-, there is no dispute and learned counsel has fairly agreed that they are required to deposit the amount in cash in view of the decision of the High Court. - appellant is liable to pay Rs. 53,768/- with interest. On payment of this amount, the appellant shall be eligible for taking Cenvat credit which has been reversed earlier, into their account. As regards penalty is concerned, taking into submissions made by both sides, I consider, it is in the interest of justice, that the penalty be reduced to Rs. 30,000 - Decided partly in favour of assessee.
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2014 (6) TMI 819
Valuation of goods - Inclusion of freight charges - Held that:- As per the provisions of Rule 5 of the Valuation Rules, the actual cost of transportation from the place of removal to place of delivery of such excisable goods is excluded from the transaction value provided the cost of transportation is charged to the buyers, in addition to the price of goods and shown separately in the invoices for such excisable goods - freight charges are separately recovered from the customers by issuing debit note, therefore the respondents are fulfilling the conditions imposed under Rule 5 of the Valuation Rules. In these circumstances, we find no infirmity in the impugned order - Decided against Revenue.
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2014 (6) TMI 818
Classification of goods - Refined Palm Stearin - Classification under heading 1511 90 or under heading 3823 11 - extended period of limitation - Held that:- The appellant claims to have had believed during the period of dispute that their product was classifiable under heading 1511 and, hence, they cleared the goods by claiming the benefit of the relevant exemption notification. It further appears from the submissions of both sides that this Bench, in two recent stay orders, granted waiver and stay in favour of similar manufacturers of 'refined palm stearin', having found prima facie case on the ground of time-bar - there was no clearance of the goods during the period from April 2011 to March 2012 and that the impugned demand is practically for the period from September 2008 to March 2011, which is apparently beyond the normal period of limitation, the show-cause notice having been issued as late as on 31.5.2012. - stay granted.
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2014 (6) TMI 792
Duty demand - Demand of differential duty - Reclassification of goods - Suppression of facts - Mis declaration of goods - Penalty - Availment of MODVAT Credit - Whether IOCL was eligible to pass on credit as per the provisions of Rule 57E of the Central Excise Rules, 1944 - Held that:- A perusal of the Tribunal’s Order does not suggest that the issue of passing of credit as per the provisions of Rule 57E, though raised by the appellant, was adjudicated by the Tribunal and have thus attained finality. This para only conveys Tribunal s observation that the issue could not be taken up by the Tribunal in view of limited scope of appeal filed by the appellant on the issue of imposition of penalty. Therefore, we agree with the Ld. Advocate of the appellant that this issue was not adjudicated by the Tribunal and thus the question of attaining its finality does not arise. It has thus to be held that impugned credit was admissible to IPCL.
On the date of payment of differential duty on 09.02.2000, and also during the period of demand, erstwhile Central Excise Rules, 1944 were in force. The differential duty liability was cast on IOCL vide Order dated 25.08.1999 along with interest under Section 11AB and penalty under Section 11AC. Therefore, on receipt of the said order-in original dated 25.08.1999, also IOCL could not issue certificate in terms of Rule 57E of the Central Excise Rules, 1944 in force during material time on account of exception clause contained in the prevailing Rule 57E(3) of the Central Excise Rules, 1944 because penalty on account of suppression etc. under Section 11AC was imposed on IOCL by the adjudicating authority. IOCL paid differential duty of Rs.14,36,74,091/- on 09.02.2000 against OIO dated 25.08.1999 but filed an appeal with the CEGAT against imposition of interest and penalty.
Certificate was issued by IOCL on 18.09.2006, and MODVAT Credit was taken by IPCL in November, 2006 as a result of prolonged litigation which ended only on 17.05.2005 as per the final order passed by CESTAT in the case of the appellant IOCL. In view of the above observations and the case law of CCE Vs. Oil & Natural Gas Limited (2012 (11) TMI 864 - CESTAT, MUMBAI) we hold in the peculiar facts and circumstances of these appeals that IOCL has correctly issued certificate dt. 18.09.2006 and IPCL has correctly taken credit. So far as imposition of penalties upon the appellants are concerned it is held that once on merit credit has been held to be admissible there is no point of imposition of penalties upon the appellants - Decided in favour of assessee.
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2014 (6) TMI 791
Duty demand - CENVAT Credit - Clandestine removal of SS Flats - Fraudulent invoices - Held that:- Once duly admitted facts have come on record indicating that no movement of goods have taken place and only invoice having moved, no question of goods showing existence and subsequent movement arises - The material facts, outcome of investigation, gravity of allegation and strength of evidence on record clearly show that Revenue s interests have been prejudiced by the appellants causing loss to it. It is also evident that fraudulent activities have been undertaken. Otherwise also tax evasion is looked at very seriously by courts since that hinders growth of the country. As per best established legal principles, fraud and justice do not dwell together. Further fraud nullifies everything. Passing of fraudulent cenvat credit through fake invoices has been clearly admitted and credit was also deposited back. Confessional statements coupled with fake invoices do not require any other evidence to prove. - Decided against assessee.
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