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M/s United Chain Industries, M/s Kay Iron Works (Jorian) Pvt Ltd, M/s Praveen Chandra Versus Commissioner of Central Excise, Panchkula

2016 (1) TMI 60 - CESTAT NEW DELHI

Denial of CENVAT Credit - Fraudulent credit - credit on invoices without actual receipt of goods - Held that:- Appellants company neither received the inputs nor cleared final products and the entire transactions were only on paper with an intention to pass on irregular modvat credit to their buyers. We find in the present case as the transactions are only on paper and as such, the credit availed without receipt of inputs and credit utilization without clearance of final products will only pass .....

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e find that the credit of duty utilized for purported clearance of final product by the appellants resulting in cenvat credit availment by buyers stands recovered at the buyers end as admitted by both the sides. The appellants in the written submissions submitted that the full amount of cenvat credit in the improper paper transactions stand recovered along with 25% of penalty in pursuance of stay order of the Tribunal. The plea of the appellants is that concessional penalty of 25% should be avai .....

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ue involved is same. Appeal No. E/1381/2009-Ex(DB) and E/1382/2009 -Ex(DB) were filed by M/s. United Chain Industries and M/s. Kay Iron Works (Jorian) Pvt. Ltd. Appeal No. E/1383/2009 Ex(DB) was filed by M/s. Praveen Chandra deals with only penalty. 2. The brief facts of the case are that the appellants were engaged in the manufacture of machinery for sugar and paper mill and registered with the Central Excise authorities. They used raw materials like angles and channels for manufacture of machi .....

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lakhs). The appeals against the impugned order were decided by this Tribunal vide order dated 4.9.2009. The appellants challenged the above said order before Hon'ble Punjab and Haryana High Court by way of writ petition. The Hon'ble High Court vide order dated 6.10.2009, after considering the appellants grievance regarding disposal of appeals themselves at the time of hearing stay petitions directed the appellants to file application for recalling the earlier orders of this Tribunal. Ac .....

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the full disputed amount involved in the case stands recovered / paid and penalty of 25% of the revenue has already been deposited in pursuance of said order of this Tribunal, he requested for closure of proceedings by allowing them to avail the benefit of 25% penalty under section 11 AC of the Central Excise Act, 1944 and also wavier of penalty imposed on Shri Praveen Chandra. 4. Learned AR, on the other hand, contested the plea of the appellants for reducing the penalty under section 11 AC as .....

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edit utilization without clearance of final products will only pass on the undue benefit or credit with reference to buyers from respondent for such fictitious clearance of final products who in turn could have availed cenvat credit. In other words, as the appellants admittedly have not manufactured any item relevant to the present case, the question of payment of such duty on final products does not arise. As such, the passover of credit by them to a third party becomes crucial for full compens .....

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