2015 (1) TMI 587

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....r, noticed that the supplier had not reversed SAD while clearing the goods as such to the applicant in the above invoice. Then, the supplier reversed the credit on SAD and issued supplementary invoices to the applicant. The applicant availed Cenvat credit of Rs. 59,12,362/- in the month of December, 2010 on the basis of supplementary invoices issued by the supplier. The Adjudicating authority denied the said credit and confirmed the demand of duty of Rs. 59,12,362/- along with interest and penalty of Rs. 30,00,000/- on the applicant on the ground that the applicant availed irregular credit on the basis of supplementary invoices in contravention of Rule 9(1)(b) of the Cenvat Credit Rules, 2002. 2. The contention of the learned Counsel is th....

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....ception of Rule 9 (1) (b) would apply only if there is any short payment of Customs duties at the time of import, by reason of fraud, etc., by the importer, which is not the case herein. In this case, all Customs duties were paid properly by the importer at the time of import and while passing on such credit to the applicant, inadvertently, they failed to reverse SAD and there is no short-levy. .  He submits that exception of Rule 9(1)(b) would not at all apply in this case. He also submits that the demand confirmed against the supplier itself would not survive, as there was no recovery mechanism to recover the amount from the supplier and such recovery mechanism was introduced in Rule 3 (5) only from 08.01.2014. At any event, he submi....