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2015 (11) TMI 351 - CESTAT NEW DELHI

2015 (11) TMI 351 - CESTAT NEW DELHI - TMI - Fraudulent availment of CENVAT Credit - Inference of fraudulent transactions in the matter of payment of commissions to sub-brokers - Held that:- In the instance case as there is no nexus between the input service received by the appellant with the output service provided, therefore , the service received by the appellant from sub-broker cannot be treated as input service and hence service tax credit taken on such input service is also not admissible. .....

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f duty and hence they are also liable for penal action for their such act. In view of above, I agree with the order impugned of the adjudicating authority disallowing the cenvat credit amounting to ₹ 15,75,754/- taken during 2007-08 and ₹ 65,694/- during 2008-09 (upto 8/2010) invoking extended period under Section 73(1) of the Finance Act, 1994 and imposing penalty of ₹ 16,41,448/- upon the appellant under Rule 15 of the Cenvat Credit Rules, 2004 read with Section 78 of the Fin .....

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19.6.2015 in the presence of Counsel's representative Ms. Tuhina, hearing was adjourned to this date. Today when the matter is taken up for hearing there is no representation on behalf of the appellant. Hence the appeal is disposed of on its merits after perusing the memorandum of appeal, the Primary and the lower Appellate orders and after hearing the ld. A.R. for the respondent/Revenue. 2. The assessee is in appeal against the Order of the ld. Commissioner (Appeals), Central Excise, Raipu .....

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essee received from the manufacturer. On this intelligence revealed during audit, Revenue presumed that goods on which the appellant received commission were not the same as shown in the Bills of some of the sub-brokers and that the assessee had also irregularly and fraudulently claimed cenvat credit, in excess of its entitlement for what were not turely input services in respect of its output services provided. 4. The Primary and the lower Appellate authorities concurrently found on analysis of .....

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5.2 to 5.4 capture the basis for the concurrent conclusion by the authorities below. These analyses read as below: "5.2 I have gone through the agreement dated 25.3.2008 undertaken by the appellant with M/s Prakash Industries Ltd, Gogaon, Raipur and find that the brokerage will be paid to them @ ₹ 350/- to ₹ 450/- per MT, whereas in the agreement undertaken with M/s Pawan Industries will be decided at the time of sale. Further, on going through the Invoice No.COM/17 dated 3.3.20 .....

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89/- and ₹ 2,65,36,158/- against Commission and Brokerage @ ₹ 50/-to ₹ 300/- during the year 2007-08 and ₹ 50/- to ₹ 400/-during the year 2008-09 (upto 10/2008). But it was found that the appellant had paid brokerage to their sub-broker M/s Pawan Industries @ ₹ 200/- to ₹ 400/-, @ ₹ 1100 and @ ₹ 1300/-vide their Bill No.Com/STR/01 dated 1.5.2008 which is much higher than what they received from the manufacturer i.e. ₹ 50/-to ₹ 400 .....

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ies Pvt. Ltd, that the appellant received commission for sale of goods at the rate of ₹ 200/- where as they have paid commission to M/s Pawan Industries at the rate of ₹ 400/- to ₹ 1300/- for sale of such goods during the same period as evident from bill dated 29.3.2008 to 31.3.2008 and 1.5.2008. which shows that the commission paid to the sub-broker is not for the goods for which the appellant earned commission but for any other purpose. Thus services received by the appellant .....

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x Court in case of Maruti Suzuki Ltd. 2009 (240) ELT 641 (SC) holding that the output when depends on the inputs and both have integral connections, nexus and intimacy as well as relevancy, the appellant shall be allowed cenvat credit on that input. In the instance case as there is no nexus between the input service received by the appellant with the output service provided, therefore , the service received by the appellant from sub-broker cannot be treated as input service and hence service tax .....

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vat Credit of ₹ 15,29,858/- taken during the year 2007-08 and ₹ 63,870/- in 2008-09 (upto 10/2008) on such bills has rightly been disallowed by the adjudicating authority. Also being asked by the jurisdictional Range Superintendent vide his letter F.No.J-I. S.Tax/SAIAR/Pt-III/364 dated 9.3.2009 regarding wrong availment of cenvat credit of ₹ 15,93,638/-, the appellant vide his letter dated 16.3.2009 replied that they have availed cenvat credit on input service amounting to S .....

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