TMI Blog2018 (11) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee liable for availing credit fraudulently, there must be positive evidence to show that they have indulged in some wilful act enabling them to avail such wrong credit - In the present case, there is nothing brought out from the evidence so as to establish that the appellants have any role in the offence, if any, committed by M/s. Leadsman Enterprises and other first stage dealers. The appellants have availed CENVAT Credit on the duty paid on the invoices. So also the entire transaction of the appellant has been through banks. Apart from certain assumptions based on the statements given by M/s. Leadsman Enterprises, there is no cogent evidence to prove that the appellants have availed wrong credit. The demand raised cannot su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sman Enterprises had fraudulently passed on the CENVAT Credit to the appellants. 2. Apart from these purchases, M/s. Leadsman Enterprises purchased MS Wire Coils directly from M/s. Shri Abirami Industries under the cover of scrap and sold the scrap procured from open market for bills on the strength of the purchase documents received from M/s. Shri Abirami Industries without delivery of any goods. Further, officers also verified the purchase and sale documents of registered dealer M/s. Sky Sky Corporation as well as M/s. Sri Karpagam Steels. It was found that they had purchased only MS Wire Coils. 3. In view of the above facts, the Department was of the view that the appellants have availed CENVAT Credit which was fraudulently passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Department by the investigation against these facts. There is no evidence to establish that the appellants have contravened the provisions of Rule 9(3) of the CENVAT Credit Rules, 2004. The Department has not placed any evidence to prove that the appellants had any part or role in the offence, if any, committed by M/s. Leadsman Enterprises and its suppliers. There is also no evidence to show that the appellants have connived with M/s. Leadsman Enterprises and its suppliers. Since the raw materials used by appellants are scrap and the input invoices describe the materials as scrap and the duty has been discharged on such goods received by the appellant, the allegation of the Department that the appellant has received invoices without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustry that fraudulent credit is availed by issuing invoices showing the description as scrap. When the manufacturer M/s. Abirami Industries has issued invoices describing the materials as MS Wires/Coils to M/s. Shri Shri. Karpagam Steels, who is the first stage dealer, the goods which are sold by the first stage dealer issuing CENVAT invoices can only be MS Wires and Coils. So the invoices issued by the dealer M/s. Leadsman Enterprises, M/s. Shri. Karpagam Steels, etc., mentioning the goods as scrap, reveals that the credit passed on by the dealer and availed by the appellants is not eligible. 6. Heard both sides. 7. The undisputed fact of the case is that appellants have used scrap as their raw materials and the invoices issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that Sub-clause (3) of Rule 9, though states that the manufacturer/producer of excisable goods shall take all reasonable steps to ensure that the goods on which he has taken CENVAT Credit has been suffered appropriate duty, does not mean that manufacturer/producer of excisable goods has to go to such an extent so as to make enquiries with regard to the records maintained by the first stage dealer. The relevant portion of the said judgment is reproduced as under : 7. In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps to ensure that the inputs in respect of which he has taken the Cenvat credit are goods on which the appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the said assumption. It would be most unreasonable and unrealistic to expect the buyer of such inputs to go and verify the accounts of the supplier or to find out from the department of Central Excise whether actually duty has been paid on the inputs by the supplier. No business can be carried out like this, and the law does not expect the impossible. 9. From the discussions on facts as well as of law and decisions, as applied to the facts and evidence, we are of the considered opinion that the demand raised cannot sustain and required to be set aside. The demands in respect of the appellants herein is set aside with consequential benefits, if any. (Pronounced in open court on 18.09.2018) - - TaxTMI - TMITax - Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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