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TMI Blog2013 (8) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... mersible put machine and two rewinding machines none of them were installed. Beside this, there was one DG set of 85 KVA, one crucible for melting and six moulds but the same were not in working condition and were unused. At that time, the stock of raw material was checked and it was found that there was 500 kg. of bare copper wire (raw material) and copper wire scrap in 10 bags totally weighting 1200 kgs. There was also stock of 300 kg. of bare copper wire of different seizes and 200 kg. of enameled copper wire. From the condition of their factory it appeared that the factory, except for enamelling of wire, was not in a condition to manufacture, the quantity of wire whose manufacture and clearance has been shown during August 2006. In subsequent months, during the period from September, 2006 to May 2007, the appellant took further Cenvat credit of Rs. 5,71,91,775/- and thus Cenvat credit availed during the period from August 2006 to May 2007 was Rs. 6,52,21,257/-. In the ER-1 returns they had not enclosed the relevant details of the invoices regarding the Cenvat credit availed. The Jurisdictional Range staff asked the appellant vide letter dated 25/9/06, 11/10/06, 30/10/06 to supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like nickel plates/zinc from the appellant and no enamelled copper wire had been purchased. 1.4 On inquiry with Punjab State Electricity Board, it was found that their power consumption was not in consonance with the production shown in the RG-1 register. 1.5 From the above investigation, it appeared that the appellant had availed Cenvat credit amounting to Rs. 6,52,21,254/- in a fraudulent manner without actually receiving any goods during the period from August 2006 to May 2007 and without any manufacturing activity, this credit had been passed on to other persons by showing bogus production and issuing bogus invoices without supply of any goods. The entire amount of Cenvat credit fraudulently taken appeared to have been passed on by them to various persons. 1.6 Accordingly, a show cause notice dated 18/6/09 was issued to the appellant for :- (a) recovery of the allegedly fraudulently taken Cenvat credit amounting to Rs. 6,52,21,254/- from the appellant alongwith interest unit, under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 11A (1) of Central Excise Act, 1944 ; (b) imposition of penalty on the appellant firm under Rule 15 (2) of Cenvat Credit Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds cleared by the appellant and since the allegation of the department is that there was no manufacture by the appellant, even if the appellant have taken the Cenvat credit, in question, fraudulently, the same would stand reversed by them, that as regards penalty of equal amount imposed on the appellant, as shown in the ER-1 return for August 2009, this penalty stands paid by the appellant from Cenvat credit account and that in view of this, the requirement of pre-deposit of interest and balance amount of penalty may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 4. Mrs. Ranjana Jha, learned Jt. CDR, opposing the stay application, pleaded that the appellant have taken huge amount of Cenvat credit without actually receiving any material, that in spite of being repeatedly asked, they have not produced the documents on the basis of which the credit has been taken, that the appellant do not have any manufacturing activity and fraudulently taken Cenvat credit has been passed on by them to various persons by issuing bogus invoices, that the appellants plea that they have paid an amount of Rs. 6,52,21,257/- as shown in their ER-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t had been taken and in this regard a total of 14 summons had been served on them under Section 14 of the Central Excise Act, 1994, but they have neither appeared before the officers nor produced the records. It is not disputed that during visit to their factory by the officers on 28/9/06, only an enamelling machine was found to be working in condition and all other machines including DG sets either are not working or not installed. It is also seen that huge quantity of inputs are claimed to have been purchased from outside Punjab and huge quantity of finished products are claimed to have been sold to buyers outside Punjab. In both the cases, the consignments have to pass ICC, check posts at the interstate border. However on inquiry with the Assistant Commissioner of Excise and Commercial Taxation, Ludhiana it was found that during the period of dispute, neither the appellant have received any goods from outside Punjab nor they have sold any goods to buyers outside Punjab. Inquiry with the suppliers within Punjab revealed that none of them had supplied any copper ingots, copper wire etc. to the appellant under cenvatable invoices. In these circumstances, we are of prima facie view ..... 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