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2016 (3) TMI 997 - CESTAT MUMBAI

2016 (3) TMI 997 - CESTAT MUMBAI - TMI - Eligibility of CENVAT credit - fake invoices - whether the four invoices in question on the basis of which the appellant has availed the cenvat credit are genuine invoices or fake invoices - Held that:- the investigation by the department is totally faulty and defective. The department did not bother to verify the particulars contained in the invoices submitted by the appellant by visiting the premises of M/s. Annapurna Impex Pvt. Ltd. The department has .....

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are fake and invalid, was on the department and the department failed to prove the same by bringing on record any credible and convincing evidence. So much so, the appellant was not even allowed to cross-examine the office attendant whose statement was the only basis for framing the appellant. Therefore, the respondent has failed to establish the charge against the appellant. - Besides this the entire demand in this case is also time barred. The impugned show cause notice was issued on 17.1 .....

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is time barred. Further, the question of penalty does not arise when the demand is time barred. - Decided in favour of assessee - Appeal No. E/1193/10-Mum - Order No. A/86244/16/SMB - Dated:- 4-3-2016 - MR. S.S. GARG, MEMBER (JUDICIAL) For the Petitioner : Shri S.P. Tavkar, Consultant For the Respondent : Shri Sanjay Hasija, Superintendent (AR) ORDER This appeal is directed against the order-in-appeal dated 29.3.2010 passed by the Commissioner (Appeals), wherein he upheld the order of the adjudi .....

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given herein below:- Invoice No. & date Assessable value Amount of total credit availed (Rs) Credit availed at RG23A entry No. & date 666/5.2.2004 14,13,042/- 2,26,087/- 36/9.2.2004 808/17.3.2004 9,64,720/- 1,54,355/- 37/25.3.2004 73/22.6.2004 1,17,120/- 1,78,739/- 40/26.6.2004 313/25.3.2005 10,54,656/- 1,72,120/- 49/28.3.2005 The appellant has disclosed the cenvat credit availed and duty paid on the finished goods in their ER-1 returns filed for the month of February 2004, March 2004, J .....

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p and during the audit, it was pointed out to the appellant that they have availed the cenvat credit of ₹ 7,31,301/- wrongly against four fake/invalid invoices as stated above and directed the appellant to reverse the same along with interest of ₹ 1,42,764/-. The Revenue took into possession certain records vide panchnama dated 2.3.2006 and recorded statement dated 2.3.2006 of Shri Dinesh P. Jain, partner of the appellant, under Section 14 of the Central Excise Act, wherein he has st .....

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erification of the said documents from the department. Thereafter the appellant filed a refund application vide their letter dated 28.2.2007 with the jurisdictional Assistant Commissioner, seeking refund of ₹ 7,31,301/- under Section 11B of the Central Excise Act, but the Assistant Commissioner vide his letter dated 15.5.2007 returned the refund application as premature on the ground that investigation in the matter was still under progress. Thereafter a show cause notice dated 1.10.2007 w .....

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.) vide order dated 30.3.2009 confirmed the demand along with interest and penalty and appropriated the amount deposited by the appellant. Aggrieved by the same, the appellant filed appeal before the Commissioner (Appeals) who upheld the order of the adjudicating authority. Now the appellant has filed the present appeal. 3. The learned counsel for the appellant submitted that the impugned order is bad in law and is against the principles of natural justice as the respondent has failed to give du .....

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drawn and the statement of Shri Purshottam Lal was recorded on 18.5.2005 whereas the inputs were dispatched much prior to that date vide invoices No.666/5.2.2004, 808/17.3.2004, 73/22.6.2004 and 313/25.3.2005. He further submitted that the proceedings of panchnama and the statement dated 18.5.2005 could have only prospective effect and could not be made applicable with retrospective effect. He further submitted that the entire case of the department is based only on the panchnama and statement d .....

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respondent to come to the conclusion that M/s. Annapurna Impex Pvt. Ltd. did not have the facility to manufacturer copper bars/copper rods. The learned counsel also submitted that the onus to prove this allegation was squarely on the department which the department failed to discharge and, therefore, the entire investigation in this case was faulty. He cited Section 101 of the Indian Evidence Act to support his contention that the onus to prove the allegation was on the department which the depa .....

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Annapurna Impex Pvt. Ltd. Besides these, lorry receipts and cheques under which the payments were made to M/s. Annapurna Impex Pvt. Ltd. for supplier of the impugned material were also supplied to the department as a corroborative evidence, but the department conveniently ignored the same. 3.2 He further submitted that it is a sound principle of jurisprudence that the onus of proof can be shifted only when one party effectively discharges its own burden. In the instant case, had the department d .....

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x Pvt. Ltd. asking the department to physically verify the existence of availability of the machinery to manufacture copper rods, which was bypassed by the respondent. 3.4 He further submitted that the appellant was even denied cross-examination of the witnesses by the adjudicating authority. 3.5 He also submitted that as per the CBEC Circular dated 28.5.1986, the appellant had taken sufficient precautions envisaged in Rule 7(4) of the Cenvat Credit Rules, 2002 / Rule 9(5) of the Cenvat Credit R .....

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rticulars of availment of cenvat credit, then in that case it was expected from the department to carry out necessary verification as per the instructions contained in the above cited circular. Moreover, the appellant has also maintained registers/records as per para 3.10 of Chapter 5 of CBEC s Central Excise Manual, thereby complied with the provisions of Rule 9(5) of the Cenvat Credit Rules, 2004. 3.6 The learned counsel also submitted that the entire demand is time barred as there is no attem .....

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larly, he has challenged imposition of penalty under Section 11AC on the ground that there is no fraud, collusion or any wilful misstatement or suppression of facts with intent to evade payment of duty and, therefore, the respondent cannot invoke Section 11AC and moreover, the respondent has nowhere observed that the wrong availment and utilization of credit was on account of fraud or collusion etc. with intent to evade duty. 4. On the other hand, the learned AR has submitted that the onus to pr .....

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e following decisions:- (i) Annapurna Impex Pvt. Ltd. vs. CCE, Ludhiana reported in 2014 (311) ELT 291 (Tri.-Del.); (ii) Shree Labdhi Prints vs. CCE, Surat reported in 2014 (308) ELT 178 (Tri.-Ahmd.); (iii) Akik Dyechem Pvt. Ltd. vs. CCE, Ahmedabad reported in 2013 (290) ELT 273 (Tri.-Ahmd.); (iv) CCE vs. Shri Ram Aluminium Pvt. Ltd. reported in 2009 (242) ELT 202 (Bom.); (v) Chivas International vs. CCE, New Delhi reported in 2006 (197) ELT 270 (Tri.-Del.); (vi) Shri Ram Aluminium Pvt. Ltd. vs. .....

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llant, these are valid invoices containing all the particulars viz. name of the supplier of inputs, description of inputs supplied, its tariff heading, quantity, value, the duty involved, suppliers central excise registration number etc. and thereafter the partner of the appellant made in the statement under Section 14 specifically stating that they have received the material against these invoices and the appellant has also produced the verification report from the State Excise Department, whi .....

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recorded the statement of one office attendant Shri Purshottam Lal, to make the basis of the entire case and further, the statement of Shri Purshottam Lal was recorded on 18.5.2005 whereas the invoices involved in this case pertain to much earlier period. It is also pertinent to note that the payment to M/s. Annapurna Impex Pvt. Ltd. was also made by cheques by the appellant. As per the Evidence Act, the onus to prove that the invoices on which the appellant has taken cenvat credit are fake and .....

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