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TMI Blog2014 (7) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... namely M.S.Bars from M/s Sidh Balak Enterprises 17, Sector-5A, Opposite Haryana Mill, Prem Nagar, Mandi Gobind Garh, a registered dealer under the Jurisdiction of Central Excise Division Mandi Goving Garh amongst other suppliers. They claimed to have purchased MS Bars weighing 71.980 MT from M/s Sidh Balak Enterprises under following invoices:- Invoice No & date Quantity Excise duty involved 62 dt. 30.04.05 24.470 MT 92563/ 85 dt. 12.05.05 15,000 MT 58700/ 86 dt. 12.05.05 25,590 MT 100142/- 150 dt. 11.06.05 6,920 MT 26935.55/ The party availed Cenvat credit on the above invoices 3. The officers of the Central Excise Division Mandi Gobind Garh investigated a case against the said M/s Sidh Balak Enterprises 17, Sector-5A, Opposite Haryana Mill, Prem Nagar, Mandi Gobind Garh , a Proprietorship Concern owned by Shri Sachin Aggarwanshi (hereinafter referred to as Shri Sachin) and found the said firm non existing and fictitious. The said dealer obtained Central Registration No. AIOPK6617PXD001 on 13.05.04 for trading of excisable goods. During the verification of said firm, it was found that the premises declared by the said firm for operation of busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 343/- wrongly availed by the appellant on the basis of invoices issued by M/s Vinayak Enterprises. Penalty of equivalent amount to the duty was also imposed. 4. M/s Vinayak Hardware Pvt. Ltd. came in appeal before the Commissioner (Appeals) challenging the order passed by original adjudicating authority. The Commissioner (Appeals) observed that the appellant had procured the inputs from the registered dealers under the proper duty paying documents. There was no dispute on this aspect as the adjudicating authority has not mentioned anything indicating non-receipt in inputs under the cover of the said invoices. He also concluded that it was the case of the department that the goods were not received in the factory. Further there was no dispute that the appellant had discharged its contractual liability by making the payment of invoice price to the registered dealer. In fact, the payment have been made through banking channel. The appellant submitted sufficient evidence in form of copies of Sales Tax Forms, Dharm Kanta receipt, Transport GR and Bank Draft establishing receipt of goods and payment of the same to the supplier. The provisions governing the availment of the credit envisa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obind Garh, were not first/second stage dealer and invoices issued by the said firm were not valid documents under Rule 9 of the Cenvat Credit Rules, 2004. Reliance was placed on the decision of the Hon'ble CESTAT in the case of Baldev Raj Ram Murti [2007 (220)-ELT-T-786(T)] wherein it has been held that 'in case dealer is not in possession of godown at the shown place, the transaction can be inferred to be only paper transaction. 7. Revenue also took the plea that once it has come on record that dealer was not having godown on the date of issue of invoices, such invoices loose their authenticity. It clearly indicated that no goods have been received in the godown and subsequent details given in the invoices indicating clearances from the godown were not correct. Revenue has also contended that such invoices become paper transactions without receipt of the goods, even subsequent availer of the credit also became the party to the fake transaction. They have also invited attention of Hon'ble CESTAT decision in the case of Baldev Raj Ram Murti -2007 (220) ELT 786 (Tri) wherein it has been held that dealer is not in possession of godown at the shown place, the transaction can be infer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying documents in their hand. His observation that the appellant have taken due care while procuring the duty paid inputs and Cenvat credit on such invoices cannot be denied simply on the ground that invoices were issued by the dealer fraudulently, is also not acceptable. Once the fraud is involved, it vitiates the transactions and no benefit can accrue on such invoices. Commissioner (Appeals)'s finding that credit will be available even fraud at dealer stage is involved is not acceptable at all. 12. On perusal of the grounds of appeal by Revenue as well as the Hon'ble CESTAT judgments in Baldev Raj Murti - 2007 (220) ELT 786 wherein it clearly comes out that a manufacturer issued modvatable invoices without transport of any goods based on fictitious invoices issued by appellant as second stage dealer, no modvatable invoices could have been issued until goods were received by registered dealer and he could not have received goods without a godown, location and details entered in application for registration. It is fact on record that Mr. Sachin Agarbanshi , owner of the dealer's firm has taken registration with the Department as a dealer and for issuing cenvatable invoices upto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted by Ms. Mamta Sharma, Director of the Company. On the other hand, she stated that material was received on credit basis and payment was made after 45 to 60 days and entry in the ledger account of Shri Sidh Balak Enterprise have shown receipt of Rs. 5,00,000/- on 2.7.05 and Rs. 3,30,440/- on 27.7.05, through bank DD, however which has been found as not correct. 13A. It is also observed from in depth investigation undertaken by the Revenue, that Mr. Sachin has indulged in creation of fake firms without any establishment and has indulged in false transactions/trading to pass on cenvat credit fraudulently. 14. From the above discussions, I am convinced that Sachin Aggarwanshi floated the company to undertake paper transactions and these paper transactions have been proved by the confessional statements. It also came out that all these Central Excise transactions have been organized in such a way to facilitate illegal availment of credit by M/s Ved Trading Company. The role of Sachin in this fraudulent activity is clearly manifested . His subsequent actions and behavior in prolonging investigation and non-cooperation with the Department and later taking recourse to the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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