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2017 (4) TMI 840 - CESTAT HYDERABAD

2017 (4) TMI 840 - CESTAT HYDERABAD - TMI - CENVAT credit - duty paying invoices - Held that: - There is then no doubt that appellant had issued cenvatable invoices knowing fully well that there is no movement of goods and thus facilitated availment of irregular credit by fabricated documentation. Appellants have sought to defend their actions contending that it was only a book adjustment for showing more turnover in their books of accounts - imposition of penalty u/r 26 set aside - also conside .....

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ent ORDER Per Madhu Mohan Damodhar After hearing both sides on the stay application, we are proceeded to hear the appeal itself for final disposal. 2. The brief facts of the case are that consequent to investigation conducted by the Department, it appeared that one M/s. YegnaManojavam Drugs and Chemicals Ltd. (herein after Y.M. Drugs) manufacturers of bulk drugs and intermediates had indulged in incorrect availment of cenvat credit based on invoices issued by registered central excise dealers wi .....

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regularly availed credit from Y.M. Drugs, a penalty of ₹ 25,00,000/- was imposed on the appellant herein under Rule 26 of the Central Excise Rules 2002. Aggrieved, appellant is before this forum. 3. On 21.02.2017, when the matter came up for hearing, ld. Advocate Shri V.J. Sankaram, appearing on behalf of the appellant, submitted as under:- i) From the admitted facts it could be seen that there was no availment of credit for clearance of any goods and it was only a book adjustment for show .....

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ufacturers Y.M. Drugs and Pavan Drugs and Chemicals Ltd. and passed on credit amounting to ₹ 74,93,250/- and ₹ 13,13,250/-. The two manufacturers in turn issued likewise invoices to M/s. Finechem, a dealer. The dealer M/s. Finechem in turn again issued invoices (without receipt of materials) to M/s. Reliance Cellulose Products Limited (the original manufacturer who first issued the invoices). This is thus a cyclic movement of invoices with no movement of any goods. iii) Since there w .....

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er Central Excise provisions can be said to have been committed. iv) In the facts and circumstance, penalty under Rule 28 is not leviable on the appellant. 4. On the other hand, ld. AR, ShriArun Kumar, appearing on behalf of Revenue supports the adjudication. 5. Heard both sides and have gone through the records. 6.1 Appellants have come on appeal only against the penalty of ₹ 25,00,000/- imposed on them by the adjudicating authority under Rule 26 of the Central Excise Rules, 2002. This pe .....

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d the said modus operandi. It has been proved that appellant never received MCC from M/s. Reliance Cellulose Pvt. Ltd. During scrutiny of cenvat invoices issued by the appellant, department had initiated investigation into the vehicles indicated therein in which the purported materials had been supplied/transported. Such verification revealed that some vehicle numbers did not exist at all and others were non goods transport vehicles like auto rickshaw, tractor, car etc. 6.3 These findings were c .....

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