2013 (10) TMI 56

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..... 1.1 At the time of admitting the appeal following question of law was formulated for consideration of the court : "Whether in the facts and circumstances of the case the Tribunal has committed substantial error in setting aside penalty imposed upon the respondent under Rule 13 of the Cenvat Credit Rules?" 2. We heard learned senior counsel Mr. R.J. Oza, assisted by Ms. Rujuta Oza, learned advocate for the Department. None appeared for the respondent though as per the office record, the respondent was served with notice of admission on 13-9-2011. 3. The respondent was engaged in processing of grey fabrics on job charges supplied by different parties-merchants. At the relevant time in April 2002 under the scheme of deemed credit benefit, t .....

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..... ioner was whether the penalty was liable to be imposed. For dismissing the appeal of the assessee, the Appellate Commissioner was of the view that the penalty under Rule 13 of the Cenvat Credit Rules read with 11AC of the Act was illegal inasmuch as the case was of one of fraudulent transactions. 4. The Tribunal while allowing the appeal of the assessee recorded the following findings : "The whole case of the Revenue is based on the statements of suppliers. Further, in show cause notice it has been stated that summons were issued to five firms which issued challans and it was found that address found incomplete or addressee not found or in some cases suppliers address was not known. In these circumstances the case of the Revenue is based .....

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..... existence was not justified. It was observed that the assessee was maintaining a lot register and the entries were on record indicating the payments received from the merchant-manufacturers. 5.1 Those entries were acceptable and not required to be doubted as the payment was by account payee cheques. Those merchants were found to have filed return of income also. The Commissioner (Appeals) could not have held against the assessee citing a ground only that the assessee had not maintained production record in particular form. 5.2 Whether the challans were of non-existent firms or not was a question which was to be determined on the basis of material in that regard. The Tribunal has on consideration of relevant material and by drawing conclus .....

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