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Mohit Ispat Ltd., Shri Dayanand Shenal & Shri Harshwardhan Mittal Versus Commissioner of Central Excise, Goa

2017 (10) TMI 201 - CESTAT MUMBAI

CENVAT credit - duty paying documents - issue of fake invoices without receipt of duty paid goods - Held that: - it is established that dealer M/s Dhanlaxmi Steels has fraudulently issued fake invoices, therefore Cenvat Credit on such fake invoices cannot be allowed. It is settled law that fraud vitiates everything therefore whether there is involvement of Appellant in such fraud, Cenvat Credit on such invoices cannot be allowed - it is established that the Appellant was very much party to the f .....

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the proviso of section 11A is clearly invokable consequently section 11 AC which has almost same ingredients as in proviso, the penalty was rightly imposed. - Personal penalty on the Appellants namely Shri Harshvardhan, Director and Shri Dayanand Shenai, General Manager of M/s Mohit Ispat Ltd. - Held that: - the penalty on these Appellants were imposed u/r 26(2)(ii) of CER, 2002. The said provision was inserted in Rule 26 w.e.f. 01.03.2007 vide N/N. 18/2007-CE (N.T.). The period involved in .....

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e Appellant M/s Mohit Ispat Ltd. are engaged in the manufacture of M.S. Ingots, Runner, Riser etc. falling under chapter 72 of schedule to Central Excise Tariff Act, 1985. On the intelligence gathered by the officers of the Goa Regional Unit of the Directorate General of Central Excise Intelligence, Bangalore Zone. They carried out detailed investigation wherein it was found that the Appellant had availed Cenvat Credit in respect of 14 invoices which were shown issued by dealer namely M/s Dhan L .....

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ual amount of duty on the Appellant company and a personal penalty under Rule 26 (2) (ii) of Cenvat Credit Rules, 2002 was also imposed upon Shri Harshvardhan Mittal, Director of M/s Mohit Ispat Ltd. and Shri Dyanand Shenai, General Manager (Accounts and Finance) of Mohit Ispat Ltd. and Shri Ashish Agrawal Proprietor of M/s Dhan Laxmi Steel. Being aggrieved by the Order-in Original M/s Mohit Ispat Ltd., Shri Harshvardhan and Shri Dayanand Shenai filed appeals before Commissioner (Appeals) who up .....

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sion without admitting that even if some fraud has been committed by the supplier, the Appellant cannot be held responsible for the same as the Appellant are not party to that fraud. He further submits that as per the record maintained by the Appellant, the inputs covered under the subject invoices were received by the Appellant and the same was entered in raw material account and the said input were issued for production. Since the receipt and use of the inputs by the Appellant is not under dou .....

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gments: (i) Commissioner Vs. Motibhai Iron & Steel Industries [2005(316) E.L.T. 374 (Guj.)] (ii) SMI Electrowire Pvt. Ltd. Vs. Commissioner of C.Ex., Delhi [2015 (322) E.L.T.] (P&H) (iii) Shakti Steel Rolling Mills Vs. Commissioner of C. Ex., Chandigarh [2014 (304) E.L.T. 108] (Tri.) (iv) Bird Audio Electronis Vs. Commissioner of Central Excise, Delhi [2013 (293) E.L.T. 314] (Tri.) (v) Luxmi Metals Industries Vs. Commissioner of Central Excise, Delhi-II [2013 (293) E.L.T. 314] (Tri.) As .....

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General Manager of M/s Mohit Ispat Ltd, he submits that the penalty on these Appellants were imposed under rule 26 (2) (ii) of Central Excise Rules, 2002, this provision brought under statute only w.e.f. 01.03.2007 vide Notification No.8/2007-C.E (N.T.) dt. 01.03.2007. Whereas alleged offence committed in present case during October, 2006. Therefore Rule 26 (2)(ii), which was not existing at the time of committing, offence, cannot be invoked. He alternatively submits that it is a charge of the .....

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] (iii) Commr. Of C. Ex. & S.T. Chandigarh-I Vs. Asim Enterprises [2015 (328) ELT 658 (Tr)] (iv) Vee Kay Enterprises Vs.Commissioner of Central Excise [ 2011(266) ELT 436 (P&H) ] 3. Shri S.R. Nair, Ld. Examiner (A.R.) appearing on behalf of Revenue reiterates the findings of the impugned order. 4. I have carefully considered the submissions made by both the sides and perused the records. I find that the fraud committed by the supplier M/s Dhanlaxmi Steels, Raipur in as much as they issue .....

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quired to be maintained by the dealer for recording the transactions; (iv) no freight payment was made by the appellant to the dealer suggesting that no goods were transported; and (v) the details of the vehicles given for transportation of the goods were found to be of vehicles not capable of carrying the said goods. 4.1. In view of the above fact which is not under dispute it is established that dealer M/s Dhanlaxmi Steels has fraudulently issued fake invoices, therefore Cenvat Credit on such .....

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sh to the Appellant. Thus such activity was very much in connivance with the Appellant who is also based in Goa. This clearly show that the account of M/s. Dhanlaxmi Steels was maintained in Goa for convivance of withdrawing the cash so that the same can be handed over to the Appellant. In the facts and circumstances of case it is established that the Appellant was very much party to the fraud committed by M/s Dhanlaxmi Steels. In such situation, the Appellants submission regarding receipt of in .....

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d with Rule 15 of Cenvat Credit Rules, 2004. I find that as discussed above M/s. Mohit Ispat Ltd. indulged themselves in fraudulently availing Cenvat Credit. Therefore the proviso of section 11A is clearly invokable consequently section 11 AC which has almost same ingredients as in proviso, the penalty was rightly imposed. 4.3. The payment of demand along with interest paid by the appellant cannot be a reason for giving relief from imposition of penalty under section 11AC as held by Honble Supre .....

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