TMI Blog2011 (3) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... fraudulent credit - But this aspect does not strike at the root of the SCN because if any part of the duty has been paid through cash and that has been passed on to the next stage, it is not a matter of concern for the revenue - Further the violations of rules pointed out in the SCN are good enough reasons to deny the credit availed and passed on to the next stage through invoices issued from a factory which was not in existence - Decided against the assessee. - E/1607 of 2009-SM - Final Order No. 204/2011/SM(BR), - Dated:- 22-3-2011 - Mr. Mathew John, J. Appeared for Appellant : Ms. Aditi Pandey, Advocate Appeared for Respondent : Shri K.P. Singh, DR Per Mathew John: Heard arguments on both sides and perused records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with section 11AB of Central Excise Act also was proposed. The Show Cause Notice did not deal with duty paid on the finished goods stated to be cleared from the factory which was not existing. The question as to how much of such duty was paid from Cenvat credit and how much was paid from PLA also is not mentioned in the Show cause Notice. 5. The Appellant furnished a reply dated 27-11-06 to the SCN stating that the SCN was vague because there is no demand of any duty on finished goods and hence no case of evasion of excise duty is made out. It is contested that once duty is paid on finished goods cenvat credit on inputs used cannot be denied for procedural reasons. 6. It was also submitted that they were sending the inputs receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich excise duty has been paid. The Adjudicating authority passed order dated 31-01-07. The operating portion of the order is reproduced below:- (i) I disallow Cenvat credit on inputs amounting to Rs.5,42,139/- under Rule 14 of Cenvat Credit Rules, 2004. (ii) I impose a penalty of Rs.5,42,139/- under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Rules, 2002. (iii) I also order to recover interest under Rule 14 of Cenvat Credit Rules, 2002 read with Section 11AB of Central Excise Rules, 2002. (iv) I impose a personal penalty of Rs.1,00,000/- (Rs. One lakh only) against Shri Anil Kumar Verma, Proprietor of M/s Shree Ganesh Industries under Rule 26 of the Central Excise Rules, 2002. 9. Aggrieved by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as to how much of duty on final products has been paid in cash by him. If the Appellant was acting in a fraudulent manner to pass on credit, it cannot be responsibility of the department to find out how he obtained the raw materials. 12. The duty said to have been paid on final products using the Cenvat credit will in the normal course be taken and utilized by the buyers causing revenue loss in the manufacturing chain ahead. Notification 214/86-CE providing exemption from excise duty for goods manufactured on job work basis does not take into accounts goods manufactured on job-work basis for the purpose of the exempted turnover for Small Scale Units in a year (see Condition 3A(e) of Notification 8/2003-CE). Thus showing the products as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken was sold to another person before it was received in the factory of manufacture. The credit taken was reversed by the assesse on his own. The assesse was let off with a minor penalty. (v) General Fabricators Vs. CCE Raipur- 2009 (245) ELT 395. This was case where credit was allowed on the strength of an invoice issued by the holding company to the subsidiary company though the ECC Code was shown wrongly. No other matter was in dispute in this case. 14. It may be seen that none of the above cases deal with a situation were final products are cleared from a factory not in existence and the goods were claimed subsequently to be manufactured in an un-registered factory. Of the five case laws relied upon, only the case of BMA Zinc Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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