TMI Blog2017 (7) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... ag Shetty, Advocate for appellant Shri. N. N. Prabhudesai, Supdt. (AR) for respondent ORDER Per: D. N. Panda 1. While Revenue sought to add the amount of ₹ 2.50 crores exhibited by Debit Note No.6 dated 31/5/2005 (Page 28 of the appeal folder) and Debit Note No.56 dated 29/09/2003 (at page 31 of appeal folder) for an amount of ₹ 1,30,34,638/- relating to product development cost incurred by the appellant manufacturer to the assessable value of goods manufactured and cleared having nexus of the product development cost to the goods manufactured, appellant denies the same. 1.2 Appellants submit that duty has already been paid on these debit notes amounts without any dispute that duty is not payable (Page No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant M/s.ISMT is concerned, the appellant's prayer is that duty having been paid prior to issuance of the show-cause notice and at the investigation stage, there shall be no penalty under Section 11AC of the Central Excise Act, 1944. 5. Revenue on the other hand submits that during the course of investigation, undervaluation of goods was detected which had not taken into account the value of debit notes. The show-cause notice brings out questionable modus operandi of the appellant, most particularly in paragraphs 14 15 of show cause notice. Understanding of the parties was to develop certain finished goods i.e. PPT, EN 52, etc., which was done by M/s.ISSAL for appellant manufacturer. For such development, debit notes appearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants is accepted that shall grant bonus to evasion and perpetuate fraud against Revenue and shall also be an incentive to lawlessness. 7. Hon ble High Court of Madras had an occasion to decide the issues whether discharge of duty before issuance of show-cause notice shall grant immunity from penalty under section 11AC of Central Excise Act, 1944, in the case of CCE, Madurai Vs. Metal Powder Co. Ltd. - 2014 (303) ELT 71 (Mad). It is held that the penalty is punishment for an act of deliberate deception by an assessee with the intent to evade duty adopting any of the means mentioned in Section 11AC of the Central Excise Act, 1944. The facts and circumstances of the case as well as the modus operandi followed by the appellants in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he material facts and evidence stated herein before, the appellants do not get any advantage of the judgement of the Hon ble High Court of Gujrat. Admissibility of Cenvat Credit is subject to scrutiny and claimant does not get right to immunity ipso facto. There are two different jurisdictions relating to product developer and user thereof. We may state that taxes paid today is more valuable for the country to fund public welfare than sacrificing public revenue on the pulpable plea of Revenue neutrality which is subject to scrutiny to grant Cenvat Credit to a different unit. 10. It may be stated that act of fraud on Revenue is always viewed seriously. Fraud and collusion vitiate even the most solemn proceedings in any civilized syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Leyland Ltd. v. State of T.N. and Another [2004 (3) SCC 1]. Suppression of a material document would also amount to a fraud on the court (see Gowrishankar v. Joshi Amha Shankar Family Trust, [1996 (3) SCC 310] and S.P. Chengalvaraya Naidu's case AIR-1994 SC-853 . No judgment of a Court can be allowed to stand if it has been obtained by fraud. Fraud unravels everything and fraud vitiates all transactions known to the law of however high a degree of solemnity. 12. Revenue proved its case against the appellant. The appellant made attempt to be enriched at the cost of Revenue. For deliberate act of the appellant to exclude the debit note amount from the scope of duty, questionable conduct and oblique motive of the appellant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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