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2016 (10) TMI 131 - CESTAT NEW DELHI

2016 (10) TMI 131 - CESTAT NEW DELHI - 2016 (340) E.L.T. 529 (Tri. - Del.) - Cenvat demand - no manufacturing activity was noticed by the officers at the time of visit to the factory - partner admitted in his statement that no manufacturing activity took place - no material was purchased by him but cenvat credit was taken on the basis of bills mostly issued by M/s. Jagriti Plastics without receipt of accompanied material - Held that:- from the process of manufacture it is easy to see that the it .....

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plied by M/s. Jagriti Plastics. There is nothing on record to show that investigations having been undertaken against M/s. Jagriti Plastics for supply of material and other suppliers. The financial transactions involved in purchasing inputs from M/s. Jagriti Plastics as well as other suppliers have not been looked into. The most pertinent point to investigate would have been to probe cash flow back from the respondent to the supplier, substantiate the fact of non-receipt of inputs. - Revenue .....

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that the inputs on which cenvat credit has been taken, have not been received in the factory of the assessee, it would be expected from the Revenue to show at least in a few cases, where the inputs have actually been received, if not in the respondent's factory. - The respondents have taken the cenvat credit on inputs but have also cleared finished goods on payment of duty. Even though there is no discussion in the orders of the authorities below, we would expect that the cenvat credit avai .....

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2016 - Hon'ble Ms. Archana Wadhwa, Member (Judicial) And Hon'ble Mr. V Padmanabhan, Member (Technical) Shri G R Singh, DR for the Appellants Ms Seema Jain, Advocate for the Respondent ORDER Per V Padmanabhan: Two appeals filed by the Revenue against the assessee M/s. Union Metal and Shri Sunil Kumar Marwah, partner are against the order dated 14.5.08 passed by the Commissioner (Appeals), New Delhi in which he has set aside the order passed by the original authority dated 21.1.08. 2. The .....

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ed that no material was purchased by him but cenvat credit was taken on the basis of bills mostly issued by M/s. Jagriti Plastics without receipt of accompanied material. After further investigations, the assessee was served with show cause notice dated 26.3.2007 for disallowing the cenvat credit to the tune of ₹ 34 lakhs approximately. The original authority in his order dated 21.1.08 disallowed the cenvat credit and imposed penalties. However, the Commissioner (Appeals) in his appellate .....

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rtaken into the authenticity of the financial transactions involved in the purchase of inputs and sale of finished goods to the buyers. 3. Finally, he concluded that the department failed to establish that the assessee has wrongly availed the cenvat credit without physically receiving the inputs. 4. The Revenue has challenged this order of Commissioner (Appeals) mainly on the following points: (i) The statement of Shri Sunil Kumar Marwah dated 23.3.06 to the effect that they had never purchased .....

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the name of Police Commissioner and vehicle No. DL _L 0469 and DL-IL 8023 were not fit to transport the goods. (iii)The Revenue has also relied upon various case laws to the effect that it is not possible to establish every link in the chain of clandestine activity. 5. Heard Shri G R Singh, learned DR appearing for the Revenue and Ms. Seema Jain, learned advocate for the respondent assessee. 6. The Revenue s case is that no manufacturing activity was noticed by the officers at the time of visit .....

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how that thinner can simply be manufactured by mixing various solvents in a small tank or drum and no electricity connection is necessary. Invoices for purchase of inputs as well as supply of thinners to various buyers were found. As also GRs as well as sales tax payment receipts. Revenue officers during visit found that no manufacturing activity was being undertaken in the factory. From the process of manufacture it is easy to see that the item thinner can easily be made by mixing of various so .....

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upply of material and other suppliers. The financial transactions involved in purchasing inputs from M/s. Jagriti Plastics as well as other suppliers have not been looked into. The most pertinent point to investigate would have been to probe cash flow back from the respondent to the supplier, substantiate the fact of non-receipt of inputs. 7. Revenue s case is totally silent about the sale of finished goods by the respondent. Invoices were found indicating sale of finished goods to various buyer .....

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