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2015 (8) TMI 22 - CESTAT MUMBAI

2015 (8) TMI 22 - CESTAT MUMBAI - TMI - Disallowance of CENVAT Credit - Duty paying documents - whether the Cenvatable invoices issued by M/s. SSMIPL o the appellant are genuine or fake/fraudulent invoices - Confiscation of goods - Imposition of penalty - Held that:- Appellant could not give any explanation on the report submitted by sales tax authority therefore same attained finality and this report clearly shows that no transaction has been taken place from Gujarat to Maharashtra therefore su .....

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cise invoices.

In the several cases registration numbers borne by the vehicles in which goods were shown to have been transported were reported to be not in existence by concerned RTO authority. In some of the invoices issued by the said dealer to end users vehicles found to be tanker, which are incapable of transporting iron steel scrap.

Once the concerned Government authority i.e RTO has given report wherein it was found that vehicle number mentioned on the invoices are .....

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ctor of the appellant by way of recording the statement he could not give a single contrary material/evidence to demolish the evidences gathered by the investigation and relied upon for confirming the demand. It was also observed that on the basis of the investigation that there is no record to show that transportation charges either paid by the dealer or by the appellant in respect of purported transportation of the input. It was found that huge transaction was shown to have been made between M .....

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ct of ship breaking scrap and the scrap used by the appellant in their manufacturing process is other than ship breaking scrap. This established that whatever scrap the appellant used but they have neither received ship breaking scrap nor used the same in the manufacture of their final product. Therefore Cenvat Credit of duty shown to have been paid on the ship breaking scrap can not be allowed to the appellant.

If any genuineness in the whole transaction is there, the Director of M/ .....

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ut receipt and supply of any material to the appellant and accordingly passed on the fraudulent Cenvat credit to the appellant. Therefore the appellant has fraudulently taken the Cenvat credit on the invoices issued by M/s. SSMIPL. - Decided against the assessee.

If the penalty under Section 11AC which is equal to the Cenvat amount has been imposed, separate penalty of similar amount imposed under Section Rule 13(1) of Cenvat Credit Rules, 2002 was not warranted. Moreover penalty of & .....

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orrect Rule 15(1)) of Cenvat Credit Rules, 2002 was wrongly imposed. - Decided partly in favour of assessees. - Appeal No. E/382, 383/09 - Dated:- 16-6-2015 - P. K. Jain, Member (T) And Ramesh Nair, Member (J),JJ. For the Appellant : Shri Prashant Patankar, Adv. For the Respondent : Shri V K Agarwal, Addl. Commissioner (AR) ORDER Per: Ramesh Nair: These two appeals are directed against order-in-original No. 42/SLM (42) COMMR/RGD/08-09 dated 05/1/2009 passed by Commissioner of Central Excise, Rai .....

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the total quantity of 3826.790 MT, details of which are given as per the Annexure I, II & III attached to the notice, are liable for confiscation , since the Cenvat Credit in respect of the said goods have been taken without taking reasonable steps to ensure that appropriate Central Excise duty on the said inputs has been paid, as indicated in the documents viz. Central Excise invoices accompanying the inputs. Accordingly, I impose a penalty of ₹ 1,29,51,948/- (Rupees one Crore twenty .....

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re twenty nine lakhs fifty one thousand nine hundred forty eight only) on the M/s. Vipras Castings Ltd. Under Section 11AC of the Central Excise Act, 1944 read with Rule 13(2) of the Cenvat Credit Rules, 2002. 5. I also impose a penalty of ₹ 10,00,000/- (Rs. Ten Lakhs Only) on Shri. Ashish H. Goradia, Director, M/s. Vipras Castings Ltd. (the Noticee referred to at Sr. No. 2 of the show cause notice) under Rule 173Q read with Rule 57 I of the Central Excise Ruels, 1944 Rule 13 of the Cenvat .....

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. Nos. 4 of the show cause notice) under Rule 26 of the Central Excise (No.2) Rules, 2001. 2. The fact of the case is that appellant M/s Vipras Casting Ltd. (M/s. VCL) engaged in the manufacture of Alloy Steel and Mild Steel (M.S.) Products falling under Chapter heading No. 7206.00 and Runner and Riser falling under Chapter heading 7204.00. M/s. VCL manufacturing said finished goods from the scrap route, which they purportedly procure from various scrap dealers or from manufacturers generating s .....

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uments relevant for the inquiry were submitted by M/s. VCL under letter dated 31/1/2004 in pursuance of summons issued to them. Inquiry at the factory premises and scrutiny of documents revealed that the appellant, inter alia have availed Cenvat Credit on iron and steel ship break scrap, purportedly procured by them, from a Central Excise registered dealer namely, M/s. Simandhar Steel Movers (India) Pvt. Ltd. Mulund, Mumbai falling under the jurisdiction of the Central Excise, Mumbai-III, Commis .....

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same serial number simultaneously to various manufacturer and dealers. Due to the above manipulation jurisdictional Central Excise office issued show cause notice No. V/PI/30-29/MDN/01/265 dated 19/1/2004 to M/s. SSMIPL, Mulund proposing the suspension of their Central Excise Registration and in the adjudication registration of M/s. SSMIPL vide Order-in-Original No. 38/2003-04/AC/Mulund dated 25/3/2004 has been suspended. The said order was also upheld by the CESTAT in its order No. A.577& 5 .....

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the Cenvat Credit. In the investigation three ship breaker namely M/s. Ajay Alloy Cast Pvt. Ltd. Alang, M/s. RK Steel & Alloys, Pipavav and M/s. Baldev ship breakers Ltd. Alang against annexure 'D', Cenvat Verification form to the Superintendent of Central Excise, incharge of the respective suppliers/ship breakers in Alang & Bhavnagar verified and reported that ship breaker namely M/s. Ajay Alloy cast Pvt. Ltd. Alang, M/s. RK Steel & Alloys, Pipavav and M/s. Baldev ship break .....

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aled that the book stock was showing 1350 MT as against physical stock of only 9 MT. This shows there is huge shortage of physical stock and it indicates that M/s. SSMIPL had not been receiving any stock from ship breaker at Alang and Bhavnagar and engaged in the paper transaction only in order to pass fraudulent Cenvat Credit. The inquiry officers in their inquires regarding transportation of the impugned ship break scrap from Alang Bhavnagar to Bhivandi and Bhivandi to various destination of a .....

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Tax Check Post and R.T.O. check post, both at Bhilad (Gujarat) before entering Maharashtra state. In the verification of Sales Tax Check post record it was gathered that particulars of the consignments passing through the said check post are recorded. The said verification revealed that particulars of all the vehicles with consignments loads, passing through the said check post are maintained date wise in electronic form at the Sales tax Check Post. Scrutiny of the said computerised vehicle move .....

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ased by M/s. SSMIPL has crossed over the border of Gujarat State into state of Maharashtra during period 2001-01, 2001-02, 2002-03, 2003-04. The statement of aforesaid three ship breakers were recorded wherein it was stated that goods cleared by them were plates of various thickness obtained by ship breaking. On further inquiry Shri. Rubal Kapporchand Bansal, Director of Bansal, Director of Bansal Ship Breakers, Bhavnagar in his statement clarified that the plates obtained by ship breaking are n .....

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ckness obtained by ship breaking which is generally used for structural purpose and not for melting. They also clarified that these plates are sold at much higher rate than that for melting scrap sold by them. The representatives of various ship breakers categorically submitted that goods in question, is not meant for melting purpose. All these depositions lead to the conclusion that (a) the goods, in question, were not meant for melting purpose (b) since 'Form 45A' was supposed to be is .....

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y the said respective representatives of ship breakers, it is not financially viable to use the goods cleared by them for melting purpose due to higher value thereof as compared to melting scrap. Investigation further proceeds to verify correctness of vehicle registration number mentioned in the Central Excise invoices issued by ship breakers at Alang/Bhavnagar to ascertain whether such vehicles were used for transportation of the goods from Alang/Bhavnagar to Bhivandi i.e from ship breaker' .....

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voices were used for transporting M.S. scrap Alang to Bhivandi on relevant dates. In that inquiry it was revealed by the owner of the vehicle that his vehicle is tractor trailor and used for his agriculture and he was not aware about any M/s. SSMIPL Mumbai. One of the vehicle owner informed that during his ownership his vehicle did not transport any goods to Mumbai. One, Shri Mohsin Abdul A. Bimla, owner of Truck No. GJ 176 T 9751 stated in his statement that said truck was not utilized for tran .....

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le owner it was found that the vehicle are oil tanker, garbage transport vehicle, one of the owner has denied that the M.S. Scrap was transported for M/s. SSMIPL. Inquiry was carried out with the transporters also wherein whereabouts of the transporters was also not known as 256 summons issued to the transporters were returned undelivered. From above investigation of the transport vehicles it was found that goods have not been transported from Alang/Bhavnagar to Bhivandi/Mumbai. Director of M/s. .....

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nvestigation the department filed a case under Section 174 of IPC for non-compliance of various summons, against Hitesh Shah, the Director of M/s. SSMIPL in C.M.M. Court Mumbai, despite issuance of court summons and search warrant the same could not be executed as Hitesh Shah was absconding alongwith his family. Then court issued Proclamation of absconder against Hitesh Shah on 20/12/2005 which was published by way of advertisements in local news papers but Hitesh Shah failed to respond till dat .....

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t was found that no vehicle carrying iron and steel scrap from Bhilad and consigned to the M/s. SSMIPL had passed through the said check post. On the basis of further scrutiny of the documents it was seen that the Serial number of invoices issued by M/s. SSMIPL to M/s. VCL and also other manufacturer buyer are same which reveals that M/s. SSMIPL were issuing parallel invoices. Copies of RG23D register to consignee / buyer, the duty debit entry number and page number particulars on the Central Ex .....

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ated that wherever such orders have been placed and available with them the same shall be submitted. However, subsequently they failed to submit even a single such instance of having placed a purchase order for ship breaking scrap. He also stated that it was not possible for them to check the antecedents of duty paid nature of goods in each and every case where inputs received and invoices are received by the dealer of such inputs and as such there was no safeguard prescribed in respect of duty .....

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M/s. Simandar Steel Enterprises but he could not name any person of the said vendor with whom they transacted. The Central Excise Superintendent of Alang/Gujarat vide Letter F.No. AR-I/SBY-ALANG/SIMANDHAR/2003-04 dated 8/6/2004 submitted details of all Central Excise invoices issued in respect of clearance of excisable goods (Ship break scrap) as shown in the relevant monthly RT-12/ER-1 returns filed by the concern units under reference M/s. R.K. Steel & Alloyes Industries, Pipavav; M/s. Bal .....

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earance of goods during the month of Aug 2000 thereafter from September, 2000 to March, 2003 they have not filed returns. Gujarat Maritime Board, Alang has taken possession of their plot on 27/12/2001. Above report shows that no clearance was made by these three ship breaker after April 2000, August 2000 and Aug 2000 respectively. In the statement of Common director / partner of aforesaid firm stated that they have not sold/cleared any goods to M/s. SSMIPL during the month of June 2002 against C .....

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n form under reference. He stated that since plot No. 65 and 84 - C were taken by Gujarat Maritime Board authority, the question of manufacture and clearance of goods from the said premises / units does not arise. It was alleged that since no sale was made to M/s. Simandhar Steel Enterprises by Gujarat based Ship breaking firms, the Cenvat credit passed on such fake invoices is also not admissible to the appellant M/s. VCL. This shows that by availing fraudulent Cenvat Credit M/s. VCL appeared t .....

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port vehicle shown in the invoices are also not genuine. Regarding the discrepancies found in transport vehicles, Shri. Goradia, Director of M/s. VCL could not reply satisfactorily he had no cogent explanation in this regard. Thus regarding evidence colleted related to non-transportation of goods the same could not be refuted by the director of VCL which gives strength to the charge of fraudulent nature of paper credit availed by the appellant M/s. VCL against Central Excise invoices issued by M .....

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old by M/s. Manohar Manek Alloys (P) was purchased from M/s. SSMIPL and investigation as discussed above revealed tht all the purchase made by M/s. SSMIPL are bogus purchases and subsequent sale also fictitious and only on paper to pass on fraudulent Cenvat Credit. In view of the above investigation it was alleged in the show cause notice that the total quantity of 3826.790 MT on which M/s. VCL has availed Cenvat Credit amounting to ₹ 1,29,51,948/- is fraudulent. The show cause notice culm .....

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he goods received were not the same duty paid goods covered by subject invoices or were substituted as per the observations in the impugned order. The appellant acquiring Scavenger scrap from various unregistered dealers without actually receiving goods covered by the subject invoices. This charge of substitution of goods by scavenger scrap is presumptuous and unsubstantiated. For the sake of argument if the goods received by appellant were substituted, they had no reason to know about plausible .....

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goods purchased from second stage dealer M/s. SSMIPL during the year 2002-03 and 2003-04 respectively. Respective invoices from second stage dealer M/s. SSMIPL shows M/s. Minion Steels has buyer and the appellant as consignee in the invoices, in annexure III related to purchase from M/s. Manohar Manek Alloys (P) of Second stage dealer who in turn had purchased it from M/s. SSMIPL, the first stage dealer during year 2002-03 and 2003-04. In effect the appellant have purchased the subject goods fr .....

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invoices they could not have manufactured finished goods requiring them to pay substantial amount of duty. Moreover if the appellants were indulged Cenvat manipulation as alleged in the show cause notice they would not require to pay high amount of duty through PLA; that they are bonafide purchaser of the scrap under proper duty paid documents; appellant received goods in their factory and used the said scrap in manufacture of finished goods which they cleared on payment of duty. It was submitt .....

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cause notice/impugned order does not establish whether these transporters were concerned with any vehicle which delivered the subject goods to the appellant. Appellant also referred the query from the Hon'ble bench regarding classification of the subject goods as ship breaking scrap under head 7230 under Central Excise Tariff Act, in this contest the appellant submits that they purchased - scrap as described under subject invoices and were not responsible for classification of the subject go .....

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CCE, Delhi [2002 (148) ELT 377 (Tri. Del)] (d) S.K. Foils Ltd. vs. CCE, Rohtak [2015(315) ELT 258 (Tri Del.)] (e) CCE Aurangabad vs. M/s. R.L. Steels Pvt. Ltd. [Appeal no. E/1166/09-MUM, Order no. A/317/11/SMB/C-IV] (f) Bhairav Exports vs. CCE, Mumbai - E/3485/05 (g) CCE, Chandigarh vs. Sadashiv Castings (P) Ltd. [2005(187) ELT 381 (Tri.Del)] (h) Genesis vs. CCE, Mumbai - II [2004(176) ELT 496 (Tri-Mum)] (i) Basant Rubber Factory vs. CCE, Mumbai - II [2005(185) ELT 280 (Tri-Mum)] (j) CCE, Mumba .....

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abana Steels Pvt. Ltd. vs. CCE, Rajkot [2004 (177) ELT 332 (Tri.Del)] (r) Uni Deritend Ltd. vs. CCE, Nagpur [2011 (272) ELT 280 (Tri Mum)] In the rejoinder to the submission, Ld. Counsel placed heavy reliance on case of M/s. Bhagwati Steelcast Ltd. vs. CCE, Nashik reported in [2012(293) ELT 417 (Tri-Mumbai) appellant submits that the said decision does not help Revenue's case for the following reasons: (i) In the Bhagawati Sttelcast Ltd. stated that invoices did not accompany goods but were .....

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o not maintained gate register/material inward register which could show receipt of the material. In the present case appellant have placed on record a compilation of invoices, its corresponding GRN's and weighment slips. (iv) In the said case upon difference of opinion the matter was referred to third member. His findings in fact support the case of the appellant. In para 74.4 of the said decision it is observed as under:- "The evidence that can be led by the assessees are the GRNs or .....

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appellant have maintained material inward register and placed on record compilation of invoices supported by GRNs and weighment slips. Also in the said case Hon'ble Lordship observed that large number of invoices (306 invoices) were found to be mentioning non transport vehicles (Refer para 74.6). This is not in case in the present matter. In the present case show cause notice seeks to deny Cenvat in respect off 273 (53+207+13) invoices and RTO verification report in 18 of show cause notice r .....

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n the form of Material Inward Register. Also there was admission by the General Manager of the assessee corroborated by its Director about the alleged irregularity therefore in the present case extended period is not invokable and demand is timebar. It was further submitted that the impugned order has imposed penalty on the appellant under Section 11AC of the Central Excise Act, read with Rule 13 of the Cenvat Credit Rules, 2002 besides a separate penalty of equal amount under Rule 13(1) of CCR, .....

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attracted in the present case. It was further submitted that penalty under Section Rule 13(1) as distinct from penalty under Section 11AC in reference to Rule 13(2) are not attracted simultaneously. Rule 13(1) as well as Rule 13(2) both refer to the penalty for Cenvat Credit taken wrongly. Rule 13(2) comes into play in cases where ingredients requiring invocation of extended period exists. Thus, the penalty under rule 13(2) is mandatory in nature in the light of provisions of section 11AC of the .....

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ious reading of two provisions [Rule 13(1) of CCR, 2002 and Section 11AC read with 13 (2)] would imply that the penalty should not be imposed under both the provisions simultaneously. Even otherwise there no justification for the high quantum of penalty under rule 13(1) when penalty under Section 11AC. Regarding the penalty on Director, Shri. Ashish Goradia it was submitted that there is no evidence about his knowledge or involvement in the alleged irregularity. Neither he nor any of the employe .....

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99 (113) ELT 490 (T)] (g) Godrej Boyce & Mfg. Co.Ltd. vs. CCE,Mumbai [2002 (148) ELT 161 (T)] 4. On the other hand, Shri V.K. Agarwal, Ld. Addl. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. Ld. AR made further following submissions: (a) This is a case where appellant have availed Cenvat Credit fraudulently on the first stage dealers invoices of M/s. SSMIPL. During investigation and the in the O-IN-O the adjudicating authority held that .....

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s been availed by the appellant which proves that the invoices of M/s. SSMIPL on which the appellant has taken Cenvat Credit are bogus. (b) The said dealer has not received the goods against which he issued the Cenvat Credit invoices. It is amply proved from the following: (i) The Sales Tax Authority have reported by their letter dated 12.2.2004, 25/5/2004 and 12/1/2005 that not a single transaction of vehicles movement carrying iron and steel scrap pertaining to M/s. SSMIPL has been recorded in .....

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entral Excise invoices. (iv) Non-production of form 45-A duly sealed by the Sales Tax Authorities while crossing Gujarat border for taking concessional rate of Sales Tax for scrap claimed to have been purchased at Alang by the said dealer against 'C' form. (c) The three parties namely, M/s. R.K. Steels Alloys Industries Pvt. Ltd., M/s. Ajay Alloys Pvt. Ltd. and M/s. Baldev Ship breaker from whom the said dealer M/s. SSMIPL have alleged to have purchased ship breaking scrap, have confirme .....

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ship breaking units located at Alang, although during investigation, he stated that he will produce the purchase order. (e) Regarding cost of Transportation of such large huge quantity of iron and steel ship breaking scraps, the supplier of the goods have claimed that the transportation cost was borne by M/s. SSMIPL whereas, Director of the appellant company maintained goods covered under the said invoices were free delivery. Since cost of transportation is neither borne by the manufacturer nor .....

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e upon the manufacturer taking such credit, Sub-Rule 2 of Rule 7 of Cenat Credit Rules, further stipulated that the manufacturer taking Cenvat Credit on inputs or capital goods shall take reasonable steps to ensure that the inputs on capital goods on which he has taken credit are the goods on which appropriate duty of excise has been paid. In the present case, the appellant could not produce any document to prove that the goods on which they have taken the Cenvat Credit have been received by the .....

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stage dealer and who in turn supplied only invoices without any goods. It become amply clear that when the first stage dealer M/s. SSMIPL have not purchased/received any goods against the invoices issued by them to the second stage dealer M/s. Manohar Manek Alloys Pvt. Ltd. who have also supplied only the invoices without any goods. Since, they have not received any goods and enable the appellant to avail Cenvat Credit only on the invoices without receiving any goods which is not allowed as per .....

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dit and the extended period of time was also upheld. Since the fact in the present case are similar to the facts in the above mentioned case, the said judgment of this Tribunal is squarely applicable in the present case. (j) Ld. A.R. also rely upon this Tribunal judgment in the case of M/s. Steel India Company vs. CCE, Pune -III 2014 (320) ELT 184 (Tri-Mum). (k) Regarding the penalty on the notice Director of the Company Shri. Ashish Goradia, he submits that since he was the part of the conspira .....

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of the appellant be dismissed and order of the original adjudicating authority be upheld. 5. We have gone through the records, considered overall oral and written submissions made by both sides. 6. The issue to be decided is whether the Cenvatable invoices issued by M/s. SSMIPL o the appellant are genuine or fake/fraudulent invoices. The investigation in the independent case undertaken against M/s. SSMIPL and all the persons who have availed the Cenvat Credit on the invoices of M/s. SSMIPL revea .....

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. In view of the detailed investigation and after issuance of show cause notice bearing No.V-PI/20-29/MDN/01/265 dated 19/1/2004 to M/s. SSMIPL proposing suspension of Central Excise dealer registration on the allegation that the M/s. SSMIPL issuing the fake invoices and fraudulently passing on the Cenvat credit to the various manufacturers. The said show cause notice has been adjudicated under order in original No. 38/2012-04/AC/Mulund dated 25/3/2004 wherein suspension of dealer ship registrat .....

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totaling ₹ 10,62,90,504/- alongwith 86 co-noticees where present appellant M/s. VCL is one of the notice. From the above proceedings, it is clear that M/s. SSMIPL is indulged in passing of fraudulent Cenvat Credit. The investigation revealed that M/s. SSMIPL being first stage dealer under the Central Excise Act, 1944 shown procurement of traders goods from a manufacturer as per its statutory sale purchase record maintained in form RG23 D register. The procurement seems to have been made fr .....

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M/s. SSMIPL with corresponding input invoices submitted by the appellant it was found that the duty debit entry number, page number and particulars etc as per the RG23 D register of M/s. SSMIPL were altogether different from the particulars like duty debit entry number and page number etc. indicated on the input Central excise invoices issued by M/s. SSMIPL to M/s. VCL in the records maintained by the M/s. VCL which clearly substantiates that sale invoices of M/s. SSMIPL found on the records of .....

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ained that whatever quantity of input purchased by the dealer the same has been sold and actual duty paid under the purchase invoices of the manufacturer has been passed on. This records show clear picture that the credit to the extent duty was paid by the manufacturer is only passed on. In the present case when the details of invoices issued by M/s. SSMIPL to M/s. VCL are not matching with inward invoices and it was found as parallel invoices this itself shows that invoices issued by the M/s. S .....

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and 2003-04. We find that it is impossible that interstate sales transaction can be made without recording transaction at the check post between two states and without payment of sales tax. We also find that the appellant could not give any explanation on the report submitted by ale tax authority therefore same attained finality and this report clearly shows that no transaction has been taken place from Gujarat to Maharashtra therefore subsequent passing of Cenvat credit of transaction which has .....

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orne by the vehicles in which goods were shown to have been transported were reported to be not in existence by concerned RTO authority. In some of the invoices issued by the said dealer to end users vehicles found to be tanker, which are incapable of transporting iron steel scrap. The investigation at the Gujarat based ship breaker firm clearly revealed that during the period when the manufacturers invoices were issued by the ship breaking firms, either were not existing or the same were closed .....

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credit on such invoices is nothing but pre-planned fraud only on paper this clearly shows neither there is movement of goods nor there is payment of excise duty. One of the glaring evidence is that on physical verification of stock at M/s. SSMIPL it was found that as compared to the stock of 1350 MT shown in the RG23 D register only 9 MT stock was found, this is very clear indication that since there was no movement of material and only transaction was on paper obviously paper can be found but .....

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o revealed that in the statement, the Director of the appellant company, Shri. Ashish Goradia could not give any plausible explanation regarding the mismatch of the transport detail. He only stated that they normally purchase the scrap on free delivery basis and it is not possible to recollect under which vehicle they have received the scrap. We are of the view that once the concerned Government authority i.e RTO has given report wherein it was found that vehicle number mentioned on the invoices .....

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the appellant by way of recording the statement he could not give a single contrary material/evidence to demolish the evidences gathered by the investigation and relied upon for confirming the demand. It was also observed that on the basis of the investigation that there is no record to show that transportation charges either paid by the dealer or by the appellant in respect of purported transportation of the input. It was found that huge transaction was shown to have been made between M/s. SSMI .....

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h huge transactions without any interaction and without a piece of paper, except fake invoices is absolutely impossible. Appellant submitted that they ordered for iron and steel scrap and they have received the same and invoices also shown the description as iron and steel scrap and the said scrap is unloaded by way of magnetic lifter. It is observed that the appellant, according to the process of their manufacturing needs melting scrap however invoices of M/s. SSMIPL are in respect of ship brea .....

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hip breaking scrap which clearly established that the invoices received by the appellant is in respect of ship breaking scrap and the scrap used by the appellant in their manufacturing process is other than ship breaking scrap. This established that whatever scrap the appellant used but they have neither received ship breaking scrap nor used the same in the manufacture of their final product. Therefore Cenvat Credit of duty shown to have been paid on the ship breaking scrap can not be allowed to .....

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ng scrap and the material which was said to have been received by the appellant is not ship breaking scrap. In this case appellant should have pointed out to the dealer that material shown in the invoices are not the same which was supplied physically. It is not convincing that the documents issued for a particular items and material received is some different item and still appellant maintained that they have taken reasonable steps. The conduct of the appellant clearly shows that they are in co .....

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or iron and steel scrap and they received the same alongwith duty paying documents therefore there is no wrong doing on their part and if at all any manipulation is done it is by the dealer, therefore they should not be made suffer for same as they have legitimately purchased the input under cover of invoices and made payment through cheque. We do not agree with this, so long admittedly material shown in the invoices were not received by the appellant, credit of such invoices cannot be allowed t .....

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e same is not capable of being used by the melting unit, obviously the scrap which was used by the Appellant would undoubtedly is scavenger scrap. Even if it is presumably not correct, the fact that the goods covered by the cenvatable invoices were neither received nor used by the Appellant, thereafter even it is accepted the goods is received but it is different goods, the cenvat credit can not be allowed as the very same goods covered by the invoices were not received. The revenue heavily reli .....

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ote, gate register and material inward register therefore ratio of the judgment in the Bhagwati Steelcase ltd is not applicable. We have observed that there are ample of evidences such as non transportation of the goods, confirmation of sales tax authority that the goods have not been transported from Gujarat to Maharashtra and no sales tax have been paid, ship breaking firms were also not in operation during the period. RTO's confirmation regarding different nature of vehicle which are not .....

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se evidences merely because the appellant have maintained GRN, gate register, material inward register this cannot disprove other evidences and charges made thereupon. All these GRNs, gate register, material inward register are the documents of appellant is free to do the same and such documents can be maintained with or without receipt of the material covered under the Cenatable invoices in question therefore on this basis the ratio of the whole judgment cannot be made inapplicable. We are of t .....

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ransaction. The Hon'ble Supreme Court in the case of CC, Madras & Others vs. D. Bhormull [1983(13) ELT 1546 (SC)] has categorically held Department is not required to prove its case with mathematical precision but what is required is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. It is undisputed facts that whatever investigation / inquiries made from various authorities such as RTO, sales tax, transp .....

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investigation it has been conclusively proved that M/s. SSMIPL was fraud company and they were exclusively operating only for passing fraudulent Cenvat Credit by issuing fake invoices therefore no doubt can be raised that in some of the cases transaction are genuine and in some of the case it is not. Therefore we are of the view that the investigation conducted in respect of whatever number of transaction are sufficient to hold that in all the cases it is a case of fraudulently passing of Cenva .....

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serious fraud and we also found that merely maintenance of these records it does not disprove other evidences therefore only on the basis of these records it cannot be said that appellant have not indulged into fraud, collusion, suppression of facts etc. The appellant knowingly that they were not receiving the goods covered under the invoices i.e. ship breaking scrap availed the Cenvat credit, this clearly shows that appellant is the main person who is the part of this modus operandi of fraud th .....

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n further reinforce the charges of fraudulent passing of the Cenvat credit and availment thereof by the appellant. In view of our above discussion we are of the view that M/s. SSMIPL have issued fake invoices without receipt and supply of any material to the appellant and accordingly passed on the fraudulent Cenvat credit to the appellant. Therefore the appellant has fraudulently taken the Cenvat credit on the invoices issued by M/s. SSMIPL. Ld. Counsel relied upon the various judgments, we have .....

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