TaxTMI 
TaxTMI 
2014 (6) TMI 823
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....was revealed that one M/s Mansa Traders, Bhiwandi has availed CENVAT Credit to the tune of Rs.3,00,75,719/- and one M/s Accelerated Synthetics Pvt. Ltd. have availed CENVAT Credit to the tune of about Rs.41 lakhs on the strength of 24 invoices purportedly issued by the appellant. On cross-check made by the different department of the Revenue from the range officers, whether the appellant was registered, the Revenue learnt about the fraudulent nature of the credit availed as aforesaid. 2.2 That in the course of investigation, the Revenue learnt that the premise for which registration was sought by appellant was wrong and is fake. From the scrutiny of Bank account of the appellant firm, it was found that no transaction have taken place. The residential premises of the proprietor/appellant was searched and in the course of search the documents like copy of registration certificate, copy of the return filed, evidence of surrender of the registration certificate and rubber stamp of the firm was found. No other documents like, counterfoil of any invoice book and other documents in support of purchase and sale of any goods etc. was found. In the statement recorded on 6.4.2005, the appe....
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....dhir Bhimrajka, Surat, having his office at Perfect Textile, New Textile Market, Ring Road, Surat and the transactions are usually done over telephone with him. And he has never personally known the person by the name of Shir Kashinath Das. It was further submitted that the payments were made through cheques in favour of 'Shiv Trading Company' against the purchase of yarn for the value as per the 24 invoices in the question and these cheques where handed over to the said Sudhir Bhimrajaka. 2.4 The other Director of M/s Accelerated Synthetics Pvt. Ltd., Shri Leo Fernando also stated that the transactions are through the broker, Shri Sudhir Bhimrajka. They have never known personally M/s Shiv Trading Company or its proprietor Shri Kashinath Das. 2.5 Pursuant to the investigations made by the Revenue, show-cause notice was issued to the appellant Shiv Trading Company asking to show cause as to why not penalty be imposed under the provisions of Rule 27 of the Central Excise Rules, 2002 for obtaining registration and issue of fake/bogus invoices without any movement of goods to facilitate others in availing illegitimate CENVAT Credit. 3. Vide Order-in-Original dated 31.3.20....
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....r and payments were also made by cheque through the broker and had filed the list of 120 cheques issued against the 24 invoices in question in favour of the appellant's firm. The question arises as to whether these cheques have been encashed, in absence of any transaction in the appellant's bank account. There are numerous possibilities for non appearance/non-credit of the cheques issued by buyers of goods from the appellant. The account would have been opened with the same account number earlier also and was closed prior to 12.5.2004 and are re-opened with the same account number. Secondly, it is not uncommon in textile market to issue cross-bearer cheques, which are not credited directly in the account of the payee whose names appear on the cheque, but it can be issued/given to any broker/person to whom the payment is due and it is very difficult to trace out as to who has finally encashed the said cross-bearer cheques. (vii) Third possibility is that the appellant might be having one or more bank account, which was not disclosed to the Revenue, nor could be traced. Thus, non-appearance of transaction in the declared bank account of the appellant doe....
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....er, the Ld. Commissioner, erred in holding that the Appellant knowingly issued invalid invoices to facilitate other manufacturers to avail CENVAT Credit fraudulently and is liable for heavy penal action. In this context the Ld. Commissioner failed to appreciate the submission of the Appellant that when he had denied having issued any invoices from M/s STC and it is an admitted fact in the show-cause notice that the signatures on the bogus invoices have no matching with his signatures the allegation was baseless and not legally sustainable in absence of any documentary evidence. C) The Ld. Commissioner has recorded a contrary finding as against the findings at para 27 of the Order-in-Original wherein it is held that even though certain documents were not personally prepared by the Appellant or that such documents were not personally signed by him it cannot be a reason to exonerate the Appellant of his guilt. In other words, the lower adjudicating authority has held that the Appellant did not sign the invoices whereas the Ld. Commissioner in his findings at page 9 holds that "who else will issue the invoices". Such a findings of the Ld. Commissioner is contrary ....
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.... Commissioner has also not recorded appropriate findings to discard the said decision and invoking penalty with retrospective effect." 6. The learned Addl. Commissioner (AR) relied on the findings of the adjudicating authority and lower appellate authority. Further, reliance is placed on the ruling in the case of Vee Kay Enterprises Vs. CCE - 2011 (266) ELT 436 (P&H), wherein invoices were issued without actual delivery of goods, on the charge of abetment, enabling the buyer in wrongly availed CENVAT Credit, it was held that provisions of Rule 2692) of Central Excise Rules, 2002 introduced w.e.f. 1.3.2007, the same is not applicable in respect of the transactions prior to 1.3.2007. However, penalty is imposable on the appellant concerned in selling or dealing with goods liable to confiscation under other rules being Rule 25(1) (d) and Rule 26(1) of the Central Excise Rules. 7. Having considered the rival contentions, we find that there are no categorical findings against the appellant so as to prove the charges as alleged in the show-cause notice inspite of there being names available of the alleged supplier in the invoices from whom the appellant allegedly purchased, no enqu....