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2015 (11) TMI 92 - CESTAT MUMBAI

2015 (11) TMI 92 - CESTAT MUMBAI - TMI - Availment of fraudulent CENVAT Credit - Bogus invoices - Credit availed on the basis of duty-paying invoices without receiving any HR trimmings covered by such invoices - Violation of principle of natural justice - Opportunity of cross examination not granted - Invocation of extended period of limitation - Held that:- during the only statement that could be recorded of the appellant No.2, who was the Director of the main appellant-company, this point was .....

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s are analysed the demand in the case will stand on its own feet.

Main appellant has not produced any independent evidence so as to support that HR trimmings covered by the invoices were received by them and utilized by them except the copy of the invoices. We are not convinced that any manufacturer will receive goods without any transport documents whatsoever. In fact the appellant has not produced any transportation details to support that he has received the goods. On the contrary, .....

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esent case is relating to getting only the invoices without getting the corresponding goods and is a case of fraud which cannot happen without the active connivance of the Director himself. Under the circumstances we hold that the appellant has not only not taken adequate and reasonable care before availing the CENVAT credit but had acted in fraudulent manner to avail the credit.

In the facts and circumstances of the case, extended period of 5 years has been correctly invoked.

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action under the provisions of Rules 26 of the said Rules. We have no doubt that the HR trimmings so diverted to Viramgam were liable to confiscation and the appellants Nos. 3 to 8 have dealt with the goods and were concerned with such goods and were in the knowledge that such goods are liable to confiscation. Under the circumstances, the penalty imposed on them is correct.

Commissioner has not passed any order relating to interest under Section 11AB of the Central Excise Act, 1944. A .....

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Member (Judicial) .For the Petitioner : Shri S.P. Seth, Advocate & Shri Roshil Nichani, Advocate For the respondent : Shri V.K. Agarwal, Addl. Commissioner (AR) & Shri Rakesh Goyal, Addl. Commissioner (AR) ORDER Per: P.K. Jain: Brief facts of the case are that M/s. Ispat Industries Ltd., (appellant No. 10) is a manufacturer of H.R. coils having manufacturing units in Kalmeshwar, near Nagpur and Dolvi/Taloja near Mumbai. During the manufacture of such coils trimmings are obtained which a .....

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Malpur, Mawa, Mehsana, Vijapur, Watwa, Viramgam, etc. In fact, Viramgam appears to be the main centre. 2. The HR trimmings are sold by appellant No. 10 by online auction process. Such H.R. trimmings are bidded purchased for trading by certain traders based in Viramgam (appellant Nos. 3 to 8). Such HR trimmings are cleared by appellant No. 10 on payment of appropriate Central Excise duty and by issuing corresponding invoices indicating details of duty payments. Since the material is used by small .....

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manufacturing units of MS Ingots located in Maharashtra. MS Ingots manufacturing units require iron and steel scrap, which in turn is available in the form of bazaar or scavenger scrap which is non-duty paid. Credit of duty paid on particular goods is available only if the goods covered by the invoice is used by the availer of credit. The invoices issued by appellant No. 10 were therefore, being manipulated to indicate the name of certain manufacturers of MS ingots (in the present case, by the m .....

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umbai e.g. Shri Manish Ramavtar Agarwal of M/s. Manish Steel Corporation, Shri Pawankumar Agarwal who was controlling two companies in the name of M/s. Surajbhan Rajkumar Pvt. Ltd. and M/s. Shree Durga Iron & Steel Pvt. Ltd., both of which were registered dealer with the Central Excise department. Appellant No. 9 is a transport commission agent based in Nagpur. He was coordinating and ensuring that the goods cleared from appellant No. 10 unit at Kalmeshwar, Nagpur were transported to Viramga .....

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-commission agent based in Mumbai who was transporting the HR trimmings from appellant No. 10s unit located in Dolvi/Taloja near Mumbai to Viramgam. Further fictitious documents for safe passage from Dolvi/Taloja to Viramgam were also handled by him. Benefit of fraudulently availed credit was distributed between various appellants as also brokers/dealers (such as Shri Manish Ramavtar Agarwal and Shri Pawankumar Agarwal), etc. 3. When the transactions were dealt through the registered dealer, th .....

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of the main appellant even though the said broker would coordinate with the bidder who are generally based in Viramgam, get the goods transported to Viramgam and collect the invoices in the name of the main appellant and transmit the same to the main appellant. Further, cash for the HR trimmings will be received from the Viramgam based traders many a times, through angadia services, and there after the said cash will be sent either to the main appellant so that he can issue the account payee ch .....

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nvoices were to move to Viramgam. 4. Thus, the case of the Revenue is that the main appellant in the present case has availed CENVAT credit on the basis of duty-paying invoices issued by appellant No. 10 without receiving any HR trimmings covered by such invoices. The main appellant was, therefore, not eligible to take the CENVAT credit covered by such invoices, and the act is fraudulent in nature and is therefore liable to pay back the credit so availed, along with interest and penalty. Case ag .....

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o being used by the two transporters to show as if some of the consignments were being handled by the said transporter. Investigation revealed that no transporter with the said name at the said place existed. Investigation also revealed that registration numbers used in some of the invoices are of three wheelers, autorikshaws, oil tankers or Government vehicles which would not be suitable for transporting scrap. Statements of few vehicle owners were also recorded which indicated that they did no .....

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only carry freight from Maharashtra to Gujarat. Statements of various persons confirmed that HR trimmings were sent to Viramgam and nearby areas and only invoices are made in the name of main appellant. 6. Based upon detailed investigation, a demand notice dated 05/06/2006 was issued to the main appellant for demand, interest, and penalty as also to other appellants for penalty. The said notice required all the noticees to file the defence reply within 30 days. Para 30 of the said notice specifi .....

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as also various other relied upon documents were already elaborated in the notice. 7. Letter dated 13/11/2006 fixing the personal hearing on 15/12/2006 to the main appellant was received back unserved with postal endorsement as not claimed, sent to sender. Further, the main appellant vide their letter dated 15/12/2006 i.e. on the date of personal hearing requested for fixing another date of hearing as one of the Director was suffering from cancer and two other Directors were with him at Delhi. .....

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llection of photocopies thereof, in terms of para 30 of the notice dated 15/06/2006. Another date of personal hearing was fixed on 18/05/2007. Neither any reply was filed nor anybody appeared on the said date. Another date of personal hearing was fixed on 25/06/2007. The advocate vide letter dated 12/06/2007 informed the Commissioner that he could not get any response from the client and withdrew the Vakalatnama from the above case. This shows the casual approach by the main appellant towards th .....

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posed on all other appellants i.e. appellant No. 2 to 10 for their role in the fraudulent transactions. 8. Aggrieved by the said order of the Commissioner, some of the noticees have filed appeal and are before this Tribunal. Revenue has also filed an appeal against the order of the Commissioner. Revenues appeal is on the ground that even though the show cause notice proposes recovery of interest from the main appellant, however, Commissioner in her order has not given any finding on direction o .....

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nal on 29/04/2015 was served by pasting on the door of the factory and drawing a panchanama dated 28/04/2005 as per Section 35C of the Central Excise Act by the jurisdictional excise authorities. On the date of hearing on 29/04/2015. A fax was received requesting for adjournment so as to enable them to find the papers and appear before this Tribunal for arguments. Keeping in view the request of the main appellant and appellant No.2 the case was adjourned for 12/05/2015 and the hearing notices we .....

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No.2 are concerned, the matter was again adjourned for 28/05/2015. On the said date, again in the afternoon a fax was received from the main appellant stating that they have appointed an advocate and requested that the matter may again be adjourned as a last opportunity. Keeping in view the said request, the matter was again adjourned for 25/06/2015. On 25/06/2015 a fax was received stating that the working of the Company was looked after only by the Director, who was not keeping good health an .....

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ellant/appellant No.2 has filed the present appeal on the ground that denial of relied upon documents and return of non-relied upon documents is violative of principles of natural justice. In support of their contention they quoted the judgment of Jayantilal A Shah vs. Commissioner of Central Excise, Mumbai VI reported in 1999 (34) RLT 466 (CEGAT). It was further submitted in Memorandum of appeal that denial of cross-examination amounts to violation of principles of natural justice. It was also .....

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along with show cause notice and non-relied upon documents within a reasonable period of six months. It was further submitted that the Commissioner in his finding has stated that scrap was indeed received by the appellant from M/s. Shree Durga Iron & Steel Company Pvt. Ltd., Mumbai; M/s. Surajbhan Rajkumar Co. Pvt. Ltd., Mumbai and M/s. Jai Ambe Steel Co., Mumbai, all of them are registered dealers. It was submitted that from the above it is clear that it is not the case of the department th .....

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herefore, they are entitled for the credit. 11. It was submitted in the grounds of appeal that Explanation to sub-rule (2) of Rule 7 of the CENVAT Credit Rules, 2002, elaborates what are reasonable steps to be taken for availing CENVAT credit and in their case those steps were taken and, therefore, under the circumstances, credit of duty cannot be denied. They further quoted the following case laws in support of their contention. a) Vimal Enterprises vs. Union of India 2006 (195) ELT 267 (Guj.); .....

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any of the Central Excise provisions with the intention to evade payment of duty. They have paid full purchase value of the inputs along with the full duty element and they would have gained nothing in making themselves a party to the fraud. 13. It was also submitted that the input of 1210.950 MT involved in the case cannot have confiscated under Rule 13(1) of the CENVAT Credit Rules, 2002 as the goods were never seized and are also not available for confiscation. It was further submitted an exo .....

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mitted that it is a partnership firm and is doing trading in HR Trimmings, etc., and that they participated in the online auction conducted by M/s. Steel RX Corporation Ltd. for M/s. Ispat Industries Ltd. (IIL). The appellants were only a bidder, neither buyer nor receiver of the goods. They never received any goods from M/s.IIL nor sold any HR trimmings to the main appellant and they never availed any CENVAT credit on the goods invoiced by M/s. IIL. They have sold their right to take delivery a .....

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avour of the buyer which the commission agent brought and they were only receiving a commission of ₹ 150/- to ₹ 200/- PMT. It was further submitted that the demand consist of four parts and they are concerned only with the first part and the demand in the first part amounts to ₹ 5,15,511/-. It was further submitted that even this part of the demand was based upon not only them but along with 5 to 6 other Gujarat based bidders. Thus, the said amount of ₹ 5,15,511/- was for .....

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hey have never lifted any consignment from M/s. IIL nor they have purchased any goods from M/s. IIL nor they have availed CENVAT credit and hence no penalty under Rule 26 can be imposed. The appellant has not dealt with goods which are liable for confiscation with the knowledge that such goods were liable for confiscation and hence there is no case for imposing penalty under Rule 26. It was submitted that it would be seen from the Commissioners finding in para 161, the penalty has been imposed .....

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there was no proposal in the show cause notice for holding the goods liable for confiscation and there is no finding or conclusion for the said purpose. It was further submitted that it would be seen from the order-in-original that the proposal and confiscation order is for the inputs i.e. scrap which is used by M/s. JSPL on which no duty was paid. There was no proposal for confiscation of HR trimmings which were cleared from the factory premises of M/s. IIL for which the address was changed in .....

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company would give up the right to lift the goods by giving a change in billing address on a letter to M/s. IIL and the company has never taken the delivery of the goods from M/s. IIL. The customers were found by Shri Manish Agarwal and the delivery was made to the ultimate buyer through Shri Khodhiyar Transport of Shri Chandrakant Nathwani. It was submitted that the appellant has explained in his statement the said position about the participation in auction and transferring the rights to procu .....

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two case laws quoted in the case of appellant No.3 were reiterated. It was also submitted that the penalty has been imposed on the partnership firm as well as on the individual partner. It was submitted that the partnership firm does not have independent existence separate from partner, therefore, penalty should not be imposed on both of them. In support of this contention they relied upon the following judgments: (a) Commissioner of Central Excise, Surat vs. Alfa Synthetics 2009 (241) ELT 480 .....

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ings and both the firms have participated in the online bidding conducted by M/s. Steel RX Corporation for M/s. IIL. Learned counsel further submitted that they are only bidders and they were not buyer or receiver of the goods. It was submitted that they never had received any H.R. trimmings from M/s. IIL and they have never availed CENVAT credit on the excise invoices of M/s. IIL and they have never sold such goods and what they have done is to sell their rights to take delivery at the auction .....

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submitted that the bidding for the said goods were done by 5 to 6 Gujarat based traders and keeping in view the duty amount involved, penalty of ₹ 5 lakhs on each of the appellant is far in excess than what is provided under Rule 26. It was also submitted that penalty should not have been imposed both on the partner as also on the partnership-firm. It was also submitted that penalty has been imposed not for dealing with the goods under sub-rule (1) of Rule 26 but for issuing letters for c .....

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olding the goods liable for confiscation and there is no finding for confiscation and hence no penalty can be imposed. It was further submitted that the proposal and confiscation order is for the inputs i.e. scrap which is used by JSPL on which no duty was paid and there is no proposal for confiscation of H.R. trimmings. In other words H.R. trimmings so cleared has not been proposed for confiscation and in view of this fact no penalty can be imposed under Rule 26. For imposition of penalty both .....

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17. Learned counsel for appellant No. 8 submitted that M/s. Star Corporation is a proprietary concern of Shri Arun Acharya and they are in the business of stock broking and had participated in the auction of H.R. trimmings and they were only bidder and not buyer or receiver of the goods. The appellant never received any consignment of H.R. trimmings from M/s. IIL nor they have ever availed CENVAT credit. They never sold any such HR trimmings to main appellant. It was further submitted that they .....

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lty equal to duty under Rule 26. It was further submitted that the appellant has only sold their right to lift the goods by issuing intimation letter for change in the billing address which is a normal practice in the trade. It was further submitted that in view of the said position no penalty can be imposed under Rule 26 on them. It was also submitted that the sub-rule (2) of Rule 26 has been introduced w.e.f. 01/03/2007 and prior to this date penalty on the dealers cannot be imposed as held th .....

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efore there is no question of confiscation of the said goods and no penalty can be impose on the appellant. 18. The learned counsel for the appellant No. 9 submitted that his client is only a transport commission agent who arranges transport vehicle for lifting the goods from M/s. IIL. The appellant himself has not carried out any transportation of the goods. The goods which are obtained and transported by the appellant are duty-paid goods and covered under excise invoice and it cannot be said t .....

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ecaution to ensure duty paid goods lifted and delivered. This itself shows that there was no mala fide intention on their part and there are no grounds for invoking Rule 26 to impose penalty on them. It was further submitted that there is no proposal and confiscation order for the HR trimmings which are cleared from the factory from the premises of M/s. IIL and for which the address was shown in the bill. Thus, the HR trimmings which should have been diverted has not been proposed to be confisca .....

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been diverted after clearance they are not responsible for the same and no penalty can be imposed on them. It was further submitted that in their own case, this Tribunal has set aside the penalty in the following cases: (a) A/198-299/08/WZM/SMB/C-III dated 26/02/2008 (b) A/571-572/09/WZM/SMB/C-IV dated 07/10/2009 20. Learned Additional Commissioner (AR), on 25/06/2015 as far as the appellant No. 1 and 2 are concerned submitted that both the appellants had total non-cooperative approach from the .....

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tement he was shown the records seized from the transporter and the statement of the transporter as also other details and after going through these documents he has admitted incorrect availment of CENVAT credit and agreed to pay back CENVAT credit and in fact, he has paid also a part of the CENVAT credit amounting to ?3.90 lakhs, except this, he did not cooperate or do nothing. It was further submitted that it is not understood what non-relied upon documents were required by him. His premises w .....

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hey have never bothered to either inspect these documents or take Xerox copies of the documents. Now at the Tribunal stage, they are claiming that it is the duty of the department to supply copies of the relied upon documents along with notice. It was further submitted that the advocate of the appellant No. 1 during adjudication proceedings withdrew his vakalatnama and the advocate has stated that he has no instruction as to whether the appellant has made any effort to carry out any inspection o .....

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d 28/05/2015 he has stated that they have engaged the advocate but on 25/06/2015, they have now stated that the matter may be decided based upon their memo of appeal. Under the circumstances it cannot be said that the principles of natural justice had been violated, particularly keeping in view the fact that the appellant himself in his statement had accepted the violation and agreed to pay back irregular/fraudulent CENVAT credit availed by him. The said statement has not been retracted. It was .....

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could be violative of Article 20(3) of the Constitution of India and similar view has been taken by the Tribunal in the case of Maha Mahal Industries vs. Commissioner of Central Excise, Meerut 1995 (80) ELT 118 (Tribunal) and Jagdish Shanker Trivedi vs. Commissioner of Central Excise, Kanpur 2006 (194) ELT 299 (Tri.-Del.). 23. As far as the appellants contention about the reasonable steps to be taken, the learned AR submitted that in all the cases the invoices covered the goods HR trimmings whi .....

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ware that the goods covered by the said invoices are being diverted somewhere else and they have purchased only the invoices. It was further submitted that such an act cannot be considered as reasonable steps taken by the appellant. In fact such a conduct clearly indicates that it was fraudulent availment and a fraudulent act can never be a reasonable step. 24. It was also submitted that almost all the vehicle numbers in the invoices are of Gujarat registration and it is the common knowledge tha .....

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able for transporting scrap. The learned AR also quoted this Tribunals decision in the case of Bhagwati Steel Cast Pvt. Ltd. vs. Commissioner of Central Excise reported in 2013 (293) ELT 417 (Tri.-Mum.) in which case, the Tribunal has analyzed clearly the scheme of MODVAT credit and the steps to be taken by the appellant. In view of the above factual position the appeal of both the appellants are required to be dismissed. 25. As far as appellant Nos. 3 to 10 are concerned, during the hearing on .....

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al action under the provisions of Rule 26 of the said rules. The learned AR submitted that in view of the clear statement in para 27 of the show cause notice, the submissions made by the learned counsel for appellant No. 3 to 8 are incorrect and without any basis. He further submitted that appellant No. 3 to 7 are based in Viramgam and it is an admitted position that they are dealing in HR trimmings. It also came out very clearly in the investigation that HR trimmings were transported to Viramga .....

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m and hence the contention of the appellants are without any basis. 26. As far as appellant No. 8 is concerned he has participated in the bidding and he was in touch with both the traders in Viramgam and also Shri Manish R Agarwal. Obviously he was aware of the whole scheme of the transaction and he cannot take the plea that he has only bidded the document and has not dealt with the HR trimmings or was not concerned with the goods or did not have reason to believe the goods are liable to confisc .....

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g raised in the name of Nasik unit while the goods are actually going to Viramgam. Not only this, he was also making fictitious lorry receipts (LRs) on the name of Raipur based fictitious transport company. Other fictitious documents were also made so as to avail safe passage of the goods from the manufacturing unit to the user in and around Viramgam. 27. As far as appellant No. 10 is concerned it was submitted it is true that they have paid the full duty as per law. However, the fact remains th .....

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also clearly indicate that they were aware their HR trimmings were used by various units in and around Viramgam. Under these circumstances it was incorrect on their part to change the name of the consignee to the main appellant who was based in Nasik. In view of the above the goods cleared by them were liable to confiscation and hence they are liable to penalty. 28. The learned AR also relied upon the following case laws in support of his contentions: (a) Commissioner of Central Excise vs. Navne .....

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ustice not being followed. The learned counsel for other appellants i.e. appellant No. 3 to 10 has not made any such grievance and during the personal hearing they have put forward their submissions for decision by the Tribunal. Normally, we would like to first deal with the principles of natural justice. However, the present case has some peculiarity and, therefore, we consider it appropriate to understand the main issue involved in the present case and thereafter discuss whether principles of .....

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vat credit and is reproduced below for ready reference:- 73. It follows from the above that the? method of implementation adopted in India is the tax credit method. This economic concept of Value Added Tax has been encapsulated within the framework of Central Excise law as follows: 73.1 Under Section 37 of the Central? Excise Act, 1944, the Central Government has been given the power to make rules to carry out, in effect, the purposes of the Act. Clauses (xvi)(a) and (xvi)(aa) of sub-section (1) .....

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r of the factory or his authorised agent. Sub-rule (2) of the said Rule stipulates that the invoices shall be serially numbered and shall contain registration number, address of the concerned Central Excise Division, name of the consignee, description, classification and date of removal, mode of transport and vehicle registration number, rate of duty, quantity and value of goods and the duty payable thereon. The proviso to the said rule provides the dispensation of the copies of the invoices i.e .....

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deal with the procedure relating to availment of credit. As per Rule 3, a manufacturer or a producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as Cenvat credit) of the duties specified therein paid on any inputs or capital goods and received by the manufacturer for use in or in relation to the manufacture of final products. Rule 4 of the said Rule stipulates that Cenvat credit in respect of inputs may be taken immediately on rece .....

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Service Tax Rules, 1994 are contained in the said document. In case any particulars are missing, Cenvat credit may be taken only with the prior approval of the jurisdictional Asst./Dy. Commissioner of Central Excise, if he is satisfied that the goods or service covered by the document have been received and accounted for in the books of account of the receiver. Sub-rule (4) of the said rule further stipulates that the Cenvat credit in respect of input or capital goods purchased from a first sta .....

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dit shall lie upon the manufacturer or provider of output service taking such credit. Similar provisions existed in Rule 57A of the Central Excise Rules, 1944, Rule 7 of the Cenvat Credit Rules, 2001 and 2002. 73.4 From the above? provisions of law, it becomes evident that to avail Cenvat credit, the inputs or capital goods should have suffered the stipulated duty by the producer/manufacturer of such goods and the goods should be received by the manufacturer availing credit in his factory and th .....

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arding admissibility to Cenvat credit shall lie upon the manufacturer taking such credit. Sub-rule (2) of Rule 7 of the Cenvat Credit Rules, 2001/2002 (as they stood at the relevant time) further stipulated that a manufacturer/producer taking Cenvat credit on inputs or capital goods shall take all reasonable steps to ensure that the inputs or capital goods in respect of which he has taken Cenvat credit are goods on which appropriate duty of excise as indicated in the document accompanying the go .....

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73.5 The Central? Excise duty regime underwent a significant change with effect from 1-10-1996. Under the new regime, assessment of the tax liability by the department which hitherto existed was done away with and self assessment facility was extended to the assessees. 73.6 Paragraphs 134? and 135 of the Finance Ministers Budget Speech for the year 1996-97 lucidly explains the new regime which was introduced. 134. Our excise procedures are outdated and not in tune with the times. They need to b .....

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pose to introduce a scheme of selective audit by?the excise officers and dispense with the existing scheme of routine examination and checking of returns and documents furnished by the assessees. This scheme would also come into force from 1st October, 1996. While introducing the new regime, in para 138 thereof, the Finance Minister also observed as follows : 138. The Modvat scheme which provides for duty credit on inputs?and capital goods has been liberalised considerably over the past few year .....

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the issue of Modvatable invoices by dealers up to two stages. Suitable provisions are also being made in the Modvat Rules for charging of interest in the case of wrong availment of Modvat credit and for mandatory penalty for misuse of Modvat facility. It is in this background and context, the issues involved in the present case need to be examined. 31. At the outset we observe that the main appellant is engaged in the manufacture of MS ingots for which they require iron and steel scrap. The goo .....

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scrap or bazaar scrap. There is no reason for any prudent MS ingots manufacturer to use such HR trimmings in coil form for melting. In fact, during the only statement that could be recorded of the appellant No.2, who was the Director of the main appellant-company, this point was raised and it was pointed out that if MS ingot is manufactured using HR trimmings then the cost of production of MS ingots would be much higher than the selling price and therefore no businessman can afford to use HR tr .....

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Del.) has observed as under:- 7. We first take up the contention that there was denial of principles of natural justice by not offering the witnesses for cross-examination by the appellant Ashish Kumar Chaurasia, despite his request that all witnesses should be examined. We have already noted that the appellant, Ashish Kumar Chaurasia had cross-examined two officers on 19-6-1995. It also transpires that summons were sent to Ram Avatar Singhal, Ram Kumar Mishra and Ram Bilas Mandal (driver), Jagd .....

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ner of the goods or such person is given a reasonable opportunity of being heard in the matter, does not specify any right of cross-examination. 33. In view of the above said position we do not consider that in the facts and circumstances of the case denial of cross-examination has prejudicially affected the rights of the main appellant. We also note that even if the statements are ignored and only documents which have been recovered during the searches are analysed the demand in the case will s .....

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ost data sheet to justify the use of HR trimmings in the manufacture of ingots was not submitted. Mr. Jaiprakash Bhartia did not even respond to the summons and did not present himself for the investigation for examination. After the issue of show cause notice also, for over eight months he did not ask for the copy of any of the relied upon documents. He did not approach the office of the DGCEI for inspection of the documents, perhaps, keeping in view the fact that gist of some of the statements .....

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effort to get the copies of the relied upon documents. In the grounds of appeal it is also submitted that non-relied upon documents are required to be returned. From the show cause notice we do not find that the appellants premises were searched or documents were seized. It is not clear which non-relied upon documents the appellant has asked for. The only document that is found in the list of relied upon document is one solitary statement of the Director of the main appellant. Further, it is se .....

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pect of HR trimmings to M/s. IIL are irregular and inadmissible. Thereafter he agreed to pay the CENVAT credit wrongly taken and utilized by them. It is a well settled law that whatever has been admitted need not be proved. The above mentioned statement of the Director of the main appellant has not been retracted at any point of time and therefore has evidentiary value. Keeping in view the conduct of the main appellant and the appellant No.2 during investigation as also during the adjudication p .....

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ny transportation details to support that he has received the goods. On the contrary, there are enough documentary evidence to support that vehicle number mentioned in the invoices were in fact went to Gujarat Viramgam area with the HR trimmings. 37. Further, we find that it is undisputed that consignments were transported through the trucks having Gujarat registration Number. For the transportation of the goods within the State of Maharashtra such trucks cannot undertake this activity. None of .....

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variable going to Viramgam. It is also clear that in large number of cases Shri Chandrakant Nathwani was coordinating with M/s. Ispat Industries Ltd.s office to get the name of the consignee/buyer changed based upon the letter from the original bidder. The Register A5 and A7 recovered from M/s. SKT are reliable evidences. 38. Similar position has emerged from another transporter i.e. Diamond Roadways who was handling the consignment of Dolvi unit. In view of the above analysis we are convinced .....

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connivance of the Director himself. Under the circumstances we hold that the appellant has not only not taken adequate and reasonable care before availing the CENVAT credit but had acted in fraudulent manner to avail the credit. In view of the above position we do not find any strength in the submission of the main appellant. 39. The main appellant has also raised the issue of limitation. The present case is relating to fraudulent availment of CENVAT credit wherein only the invoices were procure .....

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the said Rules that the penalties cannot be imposed under sub-rule (1) and sub-rule (2) both. Further, the circumstances under which penalty under Rule 13 (1) and 13(2) are imposed are at variation. Hence, this plea of the appellant is rejected and we uphold the imposition of penalty both under Rule 13(1) and 13(2). 41. In the result, we dismiss the appeals filed by the main appellant and appellant No.2. 42. Rule 25 and Rule 26 are as under: Rule 25 - Confiscation and Penalty. (1) Subject to the .....

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red under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the exciseable goods in respect of which any contravention of the nature referred to in clause (a) or cla .....

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son to believe are liable to confiscation under the Act or these rides, shall be liable to a penalty not exceeding the duty on such goods or [two thousand rupees], whichever is greater. (2) Any person, who issues- (i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or (ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit unde .....

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duty paid on the HR trimmings. In view of the said position, in our view, the goods are confiscable under Rule 25(1)(d) and penalty is also imposable. 43. As far as appellant No. 3 to 8 are concerned the main contention of the advocate for the appellants was that they are only the bidder and they are neither purchaser of the goods nor handled the goods in any way. We are not convinced with such a submission. It is an admitted position that appellant No. 3 to 7 are based in and around Viramgam an .....

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licable to any person who acquires possession of or in any way concerned in transporting, removed, depositing, keeping, concealing, selling or purchasing or in any other manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation. As mentioned earlier, the traders were actively involved with the goods. They were also actively involved in getting the names of the consignee changed to the main appellant with an idea that the main appellant can avail the .....

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herefore, appellants at sr. No. 3 to 8 are liable for penal action under the provisions of Rules 26 of the said Rules. We have no doubt that the HR trimmings so diverted to Viramgam were liable to confiscation and the appellants Nos. 3 to 8 have dealt with the goods and were concerned with such goods and were in the knowledge that such goods are liable to confiscation. Under the circumstances, the penalty imposed on them is correct. 44. We also note that the Honble High Court of Gujarat in the .....

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ame would not have been possible without their active participation and connivance with each other. We also note that the said judgment of the Honble Gujarat High Court has been upheld by the Honble Supreme Court as reported in 2014 (309) ELT A131 (SC). Further, the Honble Punjab & Haryana High Court in the case of Vee Kay Enterprises vs. CCE reported in 2011 (266) ELT 436 (P&H), has held as under:- 9. As regards applicability of provisions introduced on 1-3-2007 to alleged acts commi .....

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redit was taken. In such a case, Rule 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged. We are, thus, unable to hold that .....

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s put together have bidded for the goods on which duty involved is ? 5,15,511/- and, therefore, the penalty imposed upon each of the individual should be on the lower side. We also observe that the individual appellants have not furnished any detail about the exact quantum of duty relating to the goods dealt by them. 46. Appellant has also contended that the penalty cannot be imposed on partner as well as on the partnership firm. We find that this issue is dealt by this Tribunal in appellants o .....

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s have to go to Viramgam. Not only this he was also made fictitious LRs in the name of fictitious transporter based in Raipur and fictitious documents were prepared for safe passage of goods. The original documents, after procuring from M/s. IIL were handed over to the broker/dealer in Mumbai or the main appellant. Under the facts and circumstances of the case, penalty is correctly imposed. However, we reduce the penalty from ? 5 lakhs to ? 2 lakhs keeping in view the CENVAT credit involved in t .....

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s were consigned to Viramgam based bidder and are being used by SSI units there. Under these circumstances, it was incorrect on their part to indicate the name and address of the main appellant or first stage dealer as consignee who were based in Mumbai. Since they have changed the name of the consignee in spite of the fact that the goods were being transported to Viramgam or nearby area in different State, the HR trimmings cleared have therefore become liable for confiscation as discussed earli .....

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