TaxTMI 
TaxTMI 
2016 (9) TMI 1051
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....assing fraudulent credit by trading in excisable goods namely Metal Scrap. In the course of search, conducted in the premises of said M/s Khameshwar Enterprises and the residence of its proprietor Rakesh Agarwal and as per the statements recorded of the said Rakesh Agarwal, his accountant Mr. Navshad Ahmad and others, it appeared and observed as follows: I. "Shri N.K. Jain (G.M Supply Chain) of M/s Jubilant Organosys Ltd have stated in his statement dated 25.01.2011 that Shri Rakesh Sharma forwarded the quotation on behalf of M/s Khameshwar Enterprises, C-111 BSR Insustrial Area Ghaziabad and quotation was signed by Shri Rakesh Sharma. He further stated that except Shri Rakesh Sharma no body from M/s Khmeshwar Enterprises ever met him. Therefore, it appears that material from M/s Jubilant Organosys Ltd, Gajraula was lifted by Shri Rakesh Sharma and not by Shri Rakesh Kumar Agarwal Proprietor of M/s Khmeshwar Enterprises whereas invoices were issued in the name of M/S Khmeshwar Enterprises. II. Shri Rakesh Agarwal Prop of M/s Khameshwar Enterprises in his statement dated 31.05.2011 also stated that the material was lifted by Shri Rakesh Pandit Ji from M/s Jubilant ....
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.... accounts which he does not know. VI. On further scrutiny of both the above bank accounts, it was observed that the bank drafts which were sent to M/s Jubilant Organosys Ltd Gajraula were got prepared by depositing the same amount in cash on the same day. Shri Agarwal was asked during his statement on 04.07.2011 from where he arranged the cash for making drafts. Shri Agarwal in his said statement stated that the cash was provided by Shri Rakesh Pandit for making the Bank drafts in the name of M/s Jubilant Organosys Ltd, Gajraula in advance and he handed over the Bank drafts to Shri Rakesh Pandit for further onward handing over the same to M/s Jubilant Organosys Ltd, Gajraula. VII. On scrutiny of the invoice books of M/s Khmeshwar Enterprises, it came to notice that they issued invoices S. No.01 dated 20.06.2007 to 29 dated 25.07.2007 from book no. 01 and thereafter they issued invoices from S. No.523 dated 25.12.2007 to 88 29.03.2008 from book no.2. Therefore, it evinces that the invoices which were left blank were meant to be used to cover the transactions. No prudent businessman will function in a manner as M/s Khmeshwar Enterprises functioned. The irregular inv....
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....ed from his office were arranged through brokers for Sales Tax purpose. He did not remember the broker from whom the said GRs were arranged. XI. In question No. 11 of statement dated 04.07.2011, Shri Agarwal was remembered of his statement dated 31.05.2011 wherein he assured to provide the whereabouts of the brokers. In reply, he stated that he failed to gather the information and as such could not provide to the Department. XII. In question No.12 of statement dated 04.07.2011, Shri Rakesh Agarwal was shown the statement dated 13.01.2011 (RUD-7) of Shri Rajiv Pasi S/o Sh. Bhushan Prakash owner of the Plot No.C-111, Bulandshahar Road Industrial Area, Ghaziabad wherein he stated that Shri Rakesh Agarwal had used their godown on rent only before six years. Further, on being questioned as to how he conducted his business when the godown was not in his possession during 2006-07, 2007-08 & 2008-09, Shri Agarwal stated that he had taken the said godown on rent and a rent agreement was made with the owner of said godown but at present he had no copy of said rent agreement or rent receipt. However, he had used the said godown upto March, 2008. From the above, it may be see....
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....sion to avoid litigation when they came to know about the fraudulent nature of activity on the part of Khameshwar Enterprise and the ongoing enquiry in the matter. It was further urged that reversal of the Cenvat Credit by them, does not amount to admission of any guilt on their part. It was further urged, in view of the reversal of the credit, and the interest before the issue of show cause notice, is bad and against the provisions of Law. That there is no case of any collusion between the appellant and the said Khameshwar Enterprises. Accordingly, under the facts and circumstances, no penalty was imposable on them. 5. The SCN was adjudicated vide Order-in-Original dated 28.11.2013 passed by the Assistant Commissioner, who was pleased to confirm the proposed demand with interest and appropriated the same with the Cenvat Credit already reversed and interest deposited. Further, penalty of Rs. 1,71,887/-, was also imposed under Rule 15 of CCR read with Section 11 AC of the Act. 6. Being aggrieved, the appellant preferred an appeal before the Ld. Commissioner (Appeals), who vide the impugned order, has pleased to confirm the order of the Assistant Commissioner, rejecting the app....