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of <h1>Penalties Overturned for Alleged Fraudulent Cenvat Credit Claim</h1> The Appellate Tribunal CESTAT NEW DELHI set aside penalties imposed on M/s Daga Trading Co. and its director for alleged fraudulent purchase of raw ... CENVAT credit - allegations against the appellants are that they have never purchased raw material from the various suppliers and issued bogus invoices to M/s Veekay Industries for availment of Cenvat credit - Held that: - Since, the department has not adduced any plausible evidence to substantiate its stand that the appellant did not supply the goods and only issued invoices, facilitating the buyer to avail Cenvat credit, such stand of department cannot be accepted in view of the documents/records submitted by the appellant - appeal allowed - decided in favor of appellant. Issues: Allegations of fraudulent purchase of raw material, imposition of penalties, validity of Cenvat credit, evidence submitted by appellant, department's lack of evidence, merits of impugned order.In this case, the appellant, M/s Daga Trading Co., was accused of involvement in a scheme where fraudulent purchase of raw material was made to avail inadmissible Cenvat credit. The department alleged that the appellant issued bogus invoices to facilitate this scheme. Penalties were imposed on the appellant and its director based on these allegations. The appellant contended that as a first stage dealer, they purchased goods from Rastriya Ispat Nigam Ltd. and supplied them to another company with valid invoices. They presented delivery challan-cum-invoices, transport documents, and affidavits as evidence to support their claim. The Tribunal examined the case records and found that the goods were indeed received from RINL and sold to the other company under valid Central Excise invoices. The transport documents and affidavits confirmed the physical transportation of goods. As the department failed to provide substantial evidence contradicting the appellant's submissions, the Tribunal concluded that the penalties imposed on the appellant were unjustified. Therefore, the impugned order was set aside, and the appeals were allowed in favor of the appellants. The judgment was pronounced on 12.1.2018 by Mr. S.K. Mohanty, Member (Judicial) at the Appellate Tribunal CESTAT NEW DELHI.
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