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TMI Blog2024 (7) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... dpur [DGCEI], it was revealed that some first stage dealers working only on paper were passing on the cenvat credit on the basis of invoices, wherein the goods were shown to have been manufactured by such manufacturers, who were either not in existence or were not carrying on any manufacturing activities. Further investigation revealed that the second stage dealers based in Jaipur were issuing cenvatable invoices to M/s. Amar Pratap Steel Pvt. Ltd. (main noticee) [APSPL] without delivering the goods described therein, showing the goods to have been purchased from the first stage dealers and manufactured by non-existent or non-working manufacturers. The following chart shows the details of the manufacturer, first stage dealer and the second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On all other parties, penalties were imposed under Rule 26 of the Rules. In so far as the appellant herein is concerned, penalty of Rs.3,63,778/- was imposed. Being aggrieved, the appellant had preferred an appeal, which stands rejected by the impugned order. 3. I have heard Ms. J. Kainaat, learned counsel for the appellant and Shri Mahesh Bhardwaj, Authorised Representative for the respondent and have perused the records of the case. 4. Learned counsel for the appellant, at the outset, has submitted that the order-in-original dated 18.01.2019 in the present case was challenged by APSPL, which resulted in order-in-appeal dated 11.12.2019, whereby it was held that the case made out by the Department is not legally sustainable and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e through banking channels and the department has not challenged the same. There is no case of any flow back of money, which must be there if the invoices were issued to the appellant without any goods. 7.6 I find that the appellant received material under the invoices and utilized consumed for the manufacture of final products on which duty had been paid. The case of the department is only that the invoices were received and the material was not received. I find that vide their letter dated 22.11.2019 the appellant has produced copies of Raw Material Procurement Invoices issued by M/s Balaji Steel &M/s Shree Mahalaxmi Scrap Trading Co. and party ledger account of the said dealers. I find from the aforesaid documents that they had duly av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand in a proceeding solely on the basis of statements without any evidence corroborating such statements cannot be said to be sufficient, therefore, the demand becomes unjustifiable. I rely on the following case laws (i) Rama Jain Vs Commissioner of Cus. New Delhi 2016(333) E.LT. 127 (Tri. Del.) (ii) Ashok Kumar Aggarwal Vs. Commissioner of Customs (Prev.) Mumbai 2004 (168)E.L T.2085 (Trio Mumbai) (iii) Chaudhay Steel Traders vs Commissioner of C.Ex.& S.T. Ludhiana 2015 (329) E.L.T.934 (Tri-Del.) (iv) Commissioner of C. Ex. Chandigarh Vs. Triveni Casting Pvt. Ltd., 2009 (248) E.L.T.733 (Tri.Del). I find that in the present case the whole proceeding is based on the statements of third parties. These third parties were made co-noticees in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the case, categorical findings have been recorded by the Commissioner (Appeals) in the case of APSPL, particularly that APSPL had duly received the goods as mentioned in the impugned invoices after making payment of duty, there is no justification in taking a contrary view on the same fact, which have been accepted by the Department and no appeal has been filed to challenge the same. In the circumstances, there is no reason to differ with the said order insofar as the appellant is concerned, who has been saddled with penalty of Rs.3,63,778/- under the Rule. When the demand in respect of the cenvat credit itself is not maintainable, there is no justification to affirm the penalty imposed on the appellant. 7. Learned counsel for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturers/traders existed and only much later came to know that they did not exist at all. There is no evidence or allegation of fraud by the officers, hence, it is reasonable to presume that they believed that the manufacturers/traders existed. Such being the case, the appellant cannot be faulted for also believing that the manufacturers/traders existed and trusting the registrations issued by the department and placing orders on the traders. The appellant, as the buyer, cannot be expected to investigate if the departmental officers had issued the registrations correctly or not and take business decisions accordingly. The appellant is also neither required nor is competent to launch an investigation to see if the registered dealer w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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