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2015 (5) TMI 1026 - CESTAT NEW DELHI

2015 (5) TMI 1026 - CESTAT NEW DELHI - 2015 (329) E.L.T. 199 (Tri. - Del.) - Denial of CENVAT credit - dealer issued only the paper invoices without corresponding supply of the inputs and in addition, penalty of identical amount stands imposed upon them - pre deposit demand - stay petition - Held that:- Admittedly, starting point of the investigations in the present case is at the end of the dealer, M/s. Majestic Industries Ltd. The same evidence, i.e., the statement of the transporters, wrong m .....

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b & Haryana High Court and of the Hon’ble Supreme Court. As such, we are of the view that in the present proceedings, which are emanating from the same central source of investigation at M/s. Majestic Industries Ltd. end, no different view can be adopted, at least, at this interim stage of stay. - E/51796 and 51980/2014-EX(DB) - Stay Order Nos. 51651-51652/2015-EX(DB) - Dated:- 7-5-2015 - Ms. Archana Wadhwa, Member (J) and Shri Rakesh Kumar, Member (T) Third Member on Reference : Shri R.K. Singh .....

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2. We find that M/s. Majestic Industries Ltd. was a registered dealer with the Revenue and investigations were initiated against at his end. It was allegedly found that only paper invoices were being issued by him and the number of vehicles shown in the invoices raised by him actually belong to some two wheelers, etc. Further, the investigations were initiated and evidences collected led the Revenue to believe that the appellant has not received the inputs in question. 3. The appellant .....

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actual receipt of the inputs. 3. The said submissions of the appellant were not accepted by the lower authorities, who confirmed the demands and imposed penalties. Hence, the present appeals along with stay petitions. 4. We have heard both the sides duly represented by Shri Kamaljeet Singh, ld. Advocate for the appellant and Shri Yashpal Sharma, ld. DR for the respondent, in support of the stay petitions and have gone through the impugned orders. 5. Inasmuch as M/s. Majestic Indu .....

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riginal adjudicating authority was dropped by the Commissioner in that case and on appeal by the Revenue, the Tribunal upheld the order of the Commissioner (Appeals) reported as CCE, Chandigarh v. Shakti Roll Cold Strips Pvt. Ltd. - 2007 (80) RLT 267 (CESTAT-Delhi). On going through the said order of the Tribunal, we find that the Revenue s entire case was based on the same set of investigations at the end of M/s. Majestic Industries, which are the basis for the present demand. By taking note of .....

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. 6. Being aggrieved with the said order of the Tribunal, Revenue further carried the matter to the Hon ble Punjab & Haryana High Court in the case of Commissioner of Central Excise v. Shakti Roll Cold Strips Pvt. Ltd. - 2008 (229) E.L.T. 661 (P&H). The Hon ble High Court took note of the entire facts including the fact of the statement of the transporter having denied the transportation of the goods. However, by observing that the Tribunal has already arrived at a finding that all .....

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8. As such, it is seen that the proceedings initiated, on the same evidences against the other assessees, who had procured the inputs from the same very dealer, M/s. Majestic Industries Ltd., have attained finality till the Hon ble Supreme Court s decision. Such final orders are required to be followed and in any case, at the interim stage of stay proceedings. 9. Ld. DR has drawn our attention to the Hon ble Punjab & Haryana High Court s decision in the case of Ranjeev Alloys Ltd. .....

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unal s decision in the case of Ranjeev Alloys Ltd. (supra), the appellant should be directed to deposit a part amount. 10. We do not find any merits in the above contention of the ld. DR. Admittedly, starting point of the investigations in the present case is at the end of the dealer, M/s. Majestic Industries Ltd. The same evidence, i.e., the statement of the transporters, wrong mentioning of the vehicle nos. and the evidence leading to non-transportation of the inputs were the basis for th .....

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ceedings, which are emanating from the same central source of investigation at M/s. Majestic Industries Ltd. end, no different view can be adopted, at least, at this interim stage of stay. The Punjab & Haryana High Court s decision in the case of Ranjeev Alloys Ltd. (supra) was only on the short ground of non-involvement of question of law and the facts, which were different in the case of M/s. Ranjeev Alloys Ltd. (supra) cannot be made the basis for arriving at different finding in the pres .....

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s :- 12. In this case the Cenvat credit demand of ₹ 55,91,314/- has been confirmed against M/s. Majestic Metallic Ltd., a manufacturer of galvanised steel tapes from C.R. Strips and Zinc. M/s. Majestic Metallic Ltd. have claimed the receipt of the C.R. Strips from M/s. Majestic Industries Ltd., a registered dealer and on the basis of 169 invoices regarding supply of C.R. Strips issued by M/s. Majestic Industries Ltd. had taken the above mentioned Cenvat credit. The allegation of the d .....

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sport vehicles like tankers, motorcycles, etc., in which the goods shown to have been supplied, could not be transported. (c) In 13 cases, while the GRs have been issued by the Transport Company viz. M/s. SKS Road Lines, on enquiry, it was found that there was no transport company at the given address. (d) In some cases, the GRs said to have been issued by M/s. Walia Cargo Carriers and under which the goods, covered by the invoices, in question, are claimed to have been transported, were found t .....

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ance on judgment of Hon ble Punjab & Haryana High Court in case of M/s. Shakti Roll Cold Strips Pvt. Ltd. (supra) is that the cross-examination of the transporters, whose statements have been relied upon by the department in support of the above allegation has been denied and, therefore, no reliance can be placed on the transporters statements. 14. In my view, the question as to whether in the circumstances mentioned above, the Cenvat credit can be allowed to the manufacturer, who claim .....

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ld shift to the manufacturer, who had availed the Cenvat credit and the manufacturer who would have to produce evidence in support of his claim of having received the goods. If he fails to produce such evidence, it can be presumed that the manufacturer has taken Cenvat credit on the basis of bogus invoices without actual receipt of the goods covered under the invoices. This view is in accordance with the judgments of the Apex Court in cases of - (a) Commissioner of Police, New Delhi v. Narender .....

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. 1486 (S.C.) and Commissioner of Customs, Madras v. D. Bhoormull reported in 1983 (13) E.L.T. 1546 (S.C.) wherein it has been held that - (i) once the department produces evidence of duty evasion against an assessee, the onus of proving his innocence shifts to the assessee, (ii) the department would be deemed to have been discharged its burden of proof if it adduces only that much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existe .....

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hich coupled with the presumptive evidence adduced by the prosecution or the department, would rebut the initial presumption of innocence in favour of that person and in the result, prove his guilt. 14.1 In this case, in view of the evidence on record, as discussed above, in the cases where the vehicles in which the goods covered by the invoices are claim to have been transported, are non-transport vehicles or the transport company which issued the GR is found to be non-existent or has refu .....

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rted the goods claimed to have been dispatched by M/s. Majestic Industries Ltd. to M/s. Majestic Metallic Ltd. and is not relevant at all in the cases where the GRs were of non-existent transport companies or the registration number of the vehicles mentioned in the invoices were of non-transport vehicles in which the goods covered by the invoices could not have been transported. The judgment of the Hon ble High Court in the case of Shakti Roll Cold Strips Pvt. Ltd. (supra) relied upon by the ld. .....

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t weeks and direct M/s. Majestic Industries Ltd. to deposit an amount of ₹ 2,00,000/- (Rupees two lakh only) within a period of eight weeks from today for compliance with the provisions of Section 35F of the Act. On deposit of these amounts within the stipulated period, the requirement of pre-deposit of balance amount of Cenvat credit demand, interest and penalty shall stand waived and its recovery stayed till the disposal of the appeals. Sd/- (Rakesh Kumar) Member (Technical) 16. Sin .....

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by Hon ble Member (Judicial) or whether in the facts and circumstances of this case, both the appellants are to be put to condition of pre-deposit for compliance with the provisions of Section 35F, as ordered by Member (Technical). Sd/- (Rakesh Kumar) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) 17. [Per : R.K. Singh, Member (T)]. - The following difference of opinion has been referred to me :- Whether in the facts and circumstances of this case, the requirement of pre-deposit of C .....

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this case the Cenvat credit demand of ₹ 55,91,314/- has been confirmed against M/s. Majestic Metallic Ltd., a manufacturer of galvanised steel tapes from C.R. Strips and Zinc. M/s. Majestic Metallic Ltd. have claimed the receipt of the C.R. Strips from M/s. Majestic Industries Ltd., a registered dealer and on the basis of 169 invoices regarding supply of C.R. Strips issued by M/s. Majestic Industries Ltd. had taken the above mentioned Cenvat credit. The allegation of the department is tha .....

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like tankers, motorcycles, etc., in which the goods shown to have been supplied, could not be transported. (c) In 13 cases, while the GRs have been issued by the Transport Company viz. M/s. SKS Road Lines, on enquiry, it was found that there was no transport company at the given address. (d) In some cases, the GRs said to have been issued by M/s. Walia Cargo Carriers and under which the goods covered by the invoices, in question, are claimed to have been transported, were found to be fake, as th .....

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pre-deposit is not warranted in the present case and thereby ordered a pre-deposit of ₹ 25 lakhs by M/s. Majestic Industries Ltd. and ₹ 2 lakhs by M/s. Majestic Metaliks Ltd. and added that cross-examination was not relevant where the transport company was found to be non-existent or where vehicle numbers were found to be of vehicles which could not transport the said goods. The ld. Member (Technical) while arriving at his decision, inter alia, noted :- 13. The main submission .....

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nvat credit can be allowed to the manufacturer, who claims to have been received the goods, stands settled by the judgment of Hon ble Punjab & Haryana High Court in the case of Ranjeev Alloys Ltd. - 2009 (247) E.L.T. 27 (P&H), wherein the Hon ble High Court has upheld the Tribunal s view that in the cases where the vehicles mentioned in the invoices were found to be non-transport vehicles in which the goods mentioned in the invoices could not be transported, the onus of proving that the .....

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of- . 20. Ld. Member (Judicial) on the other hand took the view that in a similar case against Shakti Roll Cold Strips Pvt. Ltd. (supra) involving similar evidence, the demand has been dropped and therefore, at this prima facie stage no pre-deposit is warranted. 21. During the hearing, appellants have essentially argued when in a similar case against Shakti Roll Cold Strips Pvt. Ltd., (where too the inputs were supplied by M/s. Majestic Industries Ltd.) the demand has not been sustain .....

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ttings containing such news. 22. I have considered the contentions of the appellants and the observations of ld. Member (Judicial) and ld. Member (Technical). Ordinarily in the wake of the kind of evidence found against the appellants including non-existence of road transport companies, whose GRs were produced, the registration numbers of vehicles claimed to have transported the goods being of such vehicles which cannot carry such items, etc., full waiver of pre-deposit would not be in orde .....

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been presumed that the Modvat credit has been taken without actual receipt of the inputs and that the said ground is not sufficient to deny the Modvat credit to the appellant by presuming that no inputs have been received by the appellant. In an appeal before the Tribunal against the order of Commissioner (Appeals), the Tribunal observed as under :- In this case, the Revenue denied the credit on the ground that the respondent had not received the inputs; however, credit was availed on the streng .....

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final product which were cleared on payment of duty, allowed the benefit. These findings are not under challenge in the present appeal. Further, the credit was availed in the year 1996 whereas present investigation was made in the year 2000. The respondents were filing regularly RT-12 returns along with necessary documents. In these circumstances, I find no infirmity in the impugned order, the appeal is dismissed. In para 5 of its order in the case of Shakti Roll Cold Strips (supra), the High Co .....

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ot challenged by the Departmental Representative before the Tribunal. The Tribunal has also noted that the findings of the Commissioner clearly established that RT-12 returns have been assessed finally by the Range Officer which contains all the documents including the invoices under dispute on the basis of which the Modvat credit has been availed and utilised and that payments for the purchase of the inputs have been made through cheque/demand draft. 23. Careful perusal of the High Court s .....

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