TMI Blog2019 (6) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... Irregular availment of CENVAT Credit is very much clear from the narration of the facts itself and the said fraud would not have come to light but for the investigations conducted by the Officers of DGCEI. It is sufficiently established that the appellants had deliberately suppressed and misstated facts with intent to avail wrong CENVAT Credit which they are not otherwise eligible - the impugned orders do not call for any interference with regard to confirmation of demand or penalties on the appellants. Demand of penalty - HELD THAT:- When equal penalty has been imposed on the assessee M/s Reliance Cellulose Products Limited, the penalty of ₹ 22.00 lakhs on the Managing Director, in our view, is on higher side. We, therefore, reduce this penalty to ₹ 10.00 lakhs. Only. But for this interference, the confirmation of demand, interest or the penalties imposed on other assessees as well as Managing Director of M/s Pavan Drugs Chemicals Pvt. Ltd. does not call for any interference. Appeal allowed in part. - E/25306/2013 E/25307/2013, E/27169/2013 E/27170/2013 - FINAL ORDER No. A/30568 – 30571/2019 - Dated:- 17-6-2019 - Ms. Sulekha Beevi C.S, MEMBER (JUDIC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cellulose Products Limited for which dealer invoices were issued by them. Basing on the CENVAT invoices issued by M/s Finechem which are issued without actual supply of material mentioned therein, M/s Reliance Cellulose Products Ltd. availed CENVAT credit eventhough they did not receive the goods namely Micro Crystaline Cellulose powder from M/s Finechem. Enquiry made with M/s Finechem showed that they neither received MCC from M/s Y M Drugs and Pavan Drugs nor supplied the same to M/s Reliance Cellulose Products Limited. The alleged transactions can be diagrammatically represented as below: 4. Since the goods as shown in the duty paying documents were not supplied by the dealers, the usage of the same by M/s Y M Drugs or M/s Pavan Drugs or M/s Reliance Cellulose Products Limited in relation to manufacture of finished products is not possible and the CENVAT Credit in such cases where the inputs were not actually received or used in the manufacture of final products was not admissible. Separate show cause notices were issued to M/s Y M Drugs Chemicals Limited and M/s Reliance Cellulose Products Limited and M/s Pavan Drugs and Chemicals Pvt. Ltd. Proceedings wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers. The above two manufacturers in turn issued invoices without supply of goods to M/s Finechem, another dealer and passed on CENVAT amount of ₹ 88,00,732/-. For ease of reference, the credit value of fictitious entries as furnished by Ld. Counsel which are given below: S.No. From to Total Quantity Credit amounts in Rs. Date of issue of Invoices 1. RCPL to Aerochem 6,00,000 Kgs ₹ 88,06,500/- February 2010 and March 2010 2. Aerochem to YM Drugs and Pavan Drugs 6,00,000 Kgs. ₹ 88,06,500/- 23rd February, 2010 to 18th March 2010, 10th March 2010 3. YM Drugs/ Pavan Drugs to Finechem 5,92,775 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants have made entries of availing CENVAT credit without receiving the inputs or using them in the manufacture, the credit so availed in their CENVAT account is fraudulent credit and against the law. The whole gamut of transaction passed on as mere paper transactions without movement of any inputs mentioned in the invoices is credit wrongly availed. As they wrongly availed credit, the provisions under Rule 14 read with Section 11 AC is attracted. The fraud would not have come to light but for the interference of DGCEI Officers. The order passed by authorities confirming the demand and recovery of the wrongly availed CENVAT Credit along with interest and also the penalties imposed are legal and proper. With regard to the appeal filed by the Managing Director, the Ld. AR submitted that the Managing Director had complete knowledge about the fraudulent availment of credit. He was also instrumental in issuing the said invoices and therefore the penalty imposed on the Managing Director is quite reasonable to the gravity of the offence. 9. Heard both sides. 10. As narrated above, it is an undisputed fact that the appellants have availed credit on fictitious i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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