TMI Blog2015 (1) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... and they had passed on such wrongly availed Cenvat credit to a number of dealers including M/s Ayushi Steels Company Ltd. and M/s Bhagwati Trading Co. by issuing bogus invoices without supply of any CR Sheets. So far as the supply of CR Sheets from M/s Pasondia Steel Profiles Ltd. is concerned, the same has to be treated as bogus and as such when M/s Pasondia Steel Profiles Ltd. had not supplied any CR Sheets to M/s Ayushi Steels Company Ltd., M/s Ayushi Steels Company Ltd. could not have supplied that material to M/s Steel Mongers (India) Pvt. Ltd. and M/s Steel Mongers (India) Pvt. Ltd. could not have supplied that material to appellant company. Therefore, notwithstanding the fact that no inquiry had been conducted by the Department with the transporters, since M/s Friendz Auto Ltd. have not produced any evidence in support of their claim of having received the CR Sheets, in my view, Cenvat credit cannot be allowed on the basis of invoice issued by M/s Steel Mongers (India) Pvt. Ltd. to them in respect of supply of CR Sheets. Therefore, the Cenvat credit amounting to ₹ 86,845/- has been correctly denied. There is no evidence that during the period of dispute M/s Pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coils and CR Strips. During August 2004 they took Cenvat credit of ₹ 1,65,962/- on the basis of two invoices issued by M/s Steel Mongers (India) Pvt. Ltd., a second stage dealer. One invoice was in respect of supply of HR Coils involving duty of ₹ 79,117/- on the basis of which the credit of the same amount was taken by the appellant company. The second invoice in respect of supply of CR sheets involving duty of ₹ 86,845/- on the basis of which the credit of the same amount was taken by the appellant company. M/s Steel Mongers (India) Pvt. Ltd. in these invoices issued by them to the appellant company, have shown supply of the goods from the first stage dealer namely M/s Bhagwati Trading Company and M/s Ayushi Steels Company Pvt. Ltd. and the manufacturer from whom the first stage dealer received the goods is mentioned as M/s Pasondia Steel Profiles Ltd., Ghaziabad . Since Department initiated investigation in respect of M/s Pasondia Steel Profiles Ltd. and during investigation, it was found that they while they were procuring the HR Coils for manufacture of CR Sheets/Strips they were not manufacturing any goods and had sold HR Coils as such but by showing bogus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been mentioned. While the appellant company has filed an appeal against the portion of the order of the Commissioner (Appeals) upholding the Cenvat credit demand, the Revenue is in appeal against the part of the order of the Commissioner (Appeals) setting aside penalty on the appellant company and M/s Steel Mongers (India) Pvt. Ltd. 2. Heard both the sides. 3. Shri K.K. Sharma, Advocate, the learned Counsel for M/s Frienz Auto Pvt. Ltd. and Shri N.K. Sharma, Advocate, the learned Counsel representing M/s Steel Mongers (India) Pvt. Ltd., pleaded that the appellant company M/s Frienz Auto Pvt. Ltd. had purchased the goods, in question HR Coils and CR Sheets from M/s Steel Mongers (India) Pvt. Ltd., that the invoices issued by M/s Steel Mongers (India) Pvt. Ltd. also mentioned the truck number in which the goods had been transported, but no inquiry had been conducted by the Investigating Officers with the transporters, that inquiry with the transporters, that absolutely no inquiry has been conducted with M/s Steel Mongers (India) Pvt. Ltd., that in absence of any inquiry with M/s Steel Mongers (India) Pvt. Ltd., and with the transporters, and merely on the basis of the inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied the materials mentioned in the invoices issued by M/s Pasondia Steel Profiles to M/s Steel Mongers (India) Pvt. Ltd. and M/s Steel Mongers (India) Pvt. Ltd. could not have supplied those goods to the appellant company. With regard to the penalty on M/s Friendz Auto Ltd. and M/s Steel Mongers (India) Pvt. Ltd., he pleaded that merely because wrong Rule has been invoked in the show cause notice, it would not vitiate the same and in this regard he relies upon the judgment of the Tribunal in the cases of CCE, Pune vs. Lanjekar Sales Corporation reported in 2007 (5) S.T.R. 272 (Tri. - Mumbai) and also the judgment of Hon ble Bombay High Court in the case of Diasrar Jewellary Ltd. vs. Commissioner reported in 2011 (266) E.L.T. A67 (Bom.). He pleaded that since M/s Friendz Auto Ltd. have taken Cenvat credit on the basis of bogus invoices without receipt of any material, penalty has been correctly imposed on them and since M/s Steel Mongers (India) Pvt. Ltd. had issued bogus invoice as a second stage dealer, penalty on them has also been correctly imposed under Rule 13 of the Cenvat Credit Rules, 2004. 5. I have considered the submissions from both the sides and perused the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 79,117/- in respect of HR Coils, there is no evidence that during the period of dispute M/s Pasondia Steel Profiles Ltd. were not selling HR Coils. On the contrary,the allegation against them is that during that period they were purchasing HR Coils and selling the same as such while showing their consumption in the manufacture of CR Sheets. There is no investigation to prove that M/s Pasondia Steel Profiles Ltd. had issued only bogus invoices to M/s Bhagwati Trading Company regarding supply of HR Coils. Therefore, the denial of Cenvat credit of ₹ 79,117/- on the basis of the invoice of M/s Steel Mongers (India) Pvt. Ltd. regarding supply of HR Coils is not correct and to this extent the impugned order has to be set aside. 8. In view of the above discussion, so far as the Cenvat credit demand is concerned, the Cenvat credit demand of ₹ 86,845/- is upheld but the impugned order confirming the Cenvat credit demand of ₹ 79,117/- is set aside. 9. Coming to imposition of penalty on the appellant company, since they have wrongly availed Cenvat credit of ₹ 86,845/- in respect of CR Sheets while as discussed above, had not been received by them, penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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