TaxTMI 
TaxTMI 
2014 (1) TMI 1475
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....als which have been filed by the revenue, are being disposed of by this judgment. 2. The following questions of law have been framed in the appeals:- "(1) Whether on the facts and in the circumstances of the case, the CESTAT was justified in law in rejecting the appeal filed by the Appellant against the Respondent who availed Cenvat Credit on the basis of invoices issued by M/s M.K. Steels, Kolkata as sequel to an inquiry and fake nature of the said invoices was proved and M/s Sarla Ispat (P) Ltd., Durgapur who was mentioned to be the manufacture of goods in the said invoices was found to be non-existent? (2) Whether on the facts and in the circumstances of the case, the CESTAT was justified in law in rejecting the appeal of the Appell....
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.... to as the 'Rules of 2002') read with Rule 9 (5) of the Rules of 2004, a manufacturer is required to check the particulars as mentioned in the invoices issued by the first stage dealer. During the course of the hearing before the Commissioner (Appeals), the assessee submitted, inter-alia, Form 31 issued by the Uttar Pradesh Trade Tax Department, the ledger account evidencing payments by cheques made to M/s MK Steels (P) Ltd., and Form RG 23-A, Part-II. It was held that the assessee has received goods against the invoices of M/s MK Steels (P) Ltd. for which payment was made by cheque and that the manufactured goods were cleared against the payment of central excise duty. The Commissioner (Appeals) also held that the transaction on th....
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....sessee had received the inputs and entered them in its records and these inputs were used in the manufacture of final products, which were cleared on payment of duty. The goods travelled from the dealer to the assessee under the cover of Form 31 issued by the Uttar Pradesh Trade Tax Department. The ledger account and RG 23 A records prove the receipt of the goods. Further, the payments were made by cheque. The Tribunal was of the view that in terms of the provisions of Rule 7 (4) of the Rules of 2002 and Rule 9 (5) of the Rules of 2004, a manufacturer is required to check the particulars as mentioned in the invoice issued by the first stage dealer and he should be familiar with him. The Tribunal has also held that it would be impractical fo....
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....or input service in respect of which he has taken the CENVAT credit are goods or services on which the appropriate duty of excise or service tax as indicated in the documents accompanying the goods or relating to input service, has been paid." 6. The Explanation to Rule 9 (3) of the Rules of 2004 provides a deeming fiction where a manufacturer or producer of excisable goods who takes cenvat credit on inputs, would be deemed to have taken reasonable steps, if he satisfies himself about the identity and address of the manufacturer or supplier or provider of input services, as the case may be, issuing the documents specified in sub-rule (1) on the basis of his personal knowledge or on the basis of a certificate given by a person with whom he ....
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....uch a situation, it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee, in the present case, was found to have duly acted with all reasonable diligence in its dealings with the first stage dealer. The view which the Tribunal has taken is consistent with the judgment of the Jharkhand High Court in Commissioner of C. Ex., East Singhbhum Vs. Tata Motors Ltd.1,where it was held as follows:- "... Once a buyer of inputs receives invoices of excisable items, unless factually it is established to the contrary, it will be presumed that when payments have been made in respect of those inputs on the basis of invoices, the buyer is entitled to assume that the excise duty has been/....