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of <h1>Appellate Tribunal Upholds Ruling on CENVAT Credit Fraud Appeal</h1> <h3>Commissioner of Central Excise, Customs and Service Tax Versus SS Okrganics Ltd.</h3> Commissioner of Central Excise, Customs and Service Tax Versus SS Okrganics Ltd. - 2017 (357) E.L.T. 545 (Tri. - Hyd.) Issues:1. Appeal against setting aside of demand for fraudulent availment of CENVAT credit.Analysis:The appeal before the Appellate Tribunal CESTAT Hyderabad involved a case where the Department challenged the order passed by the Commissioner(Appeals) regarding the demand of Rs. 11,95,213/- for fraudulent availment of CENVAT credit by M/s. SS Organics Ltd. The facts revealed that SSOL was suspected of clandestine clearance of bulk drugs and drug intermediaries without proper accounting, leading to the issuance of a show-cause notice. The original authority confirmed a duty amount and penalty for clandestine clearance and fraudulent CENVAT credit availed during the period 2002-2006. The Commissioner(Appeals) partly allowed the appeal, setting aside the demand for fraudulent CENVAT credit but remanding the issue of clandestine clearance for reconsideration. The Department's appeal focused on challenging the setting aside of the demand for fraudulent CENVAT credit.The Department, represented by the learned AR Shri Arun Kumar, argued that evidence from private records seized during searches, statements from individuals, and discrepancies in invoices indicated fraudulent CENVAT credit availed by SSOL. Specifically, the statement of Shri G. Suresh, the store incharge, highlighted instances where bills were received without corresponding raw materials, suggesting wrongful credit availment. The Department contended that these pieces of evidence, along with dealer statements, supported the claim of fraudulent credit availment. However, the respondent did not appear during the proceedings, leading to a decision based on the arguments presented by the Department.The Commissioner(Appeals) extensively analyzed the evidence presented, including the private records, statements, and the internal disputes within the company's management. It was noted that discrepancies were not found in physical stock or statutory records during the search. The Commissioner highlighted the lack of technical expertise in the statements provided and raised concerns about the credibility of the evidence, especially regarding the recollection of specific transactions. Additionally, the absence of further investigation into dealer actions and lack of transporter evidence weakened the case for fraudulent credit availment. Ultimately, the Commissioner upheld the decision to set aside the demand for fraudulent CENVAT credit due to insufficient evidence and unresolved discrepancies in the investigation.In conclusion, the Appellate Tribunal dismissed the Department's appeal, affirming the Commissioner(Appeals)'s ruling on the issue of fraudulent availment of CENVAT credit by SS Organics Ltd. The decision emphasized the importance of substantial evidence and thorough investigation to establish claims of fraudulent activities, highlighting the need for comprehensive verification and corroboration in such cases.
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