TaxTMI 
TaxTMI 
2017 (6) TMI 632
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntral Excise Duty paid on SS circles and SS rectangle. They were also claiming rebate of Central Excise Duty paid on the inputs used in the manufacture of SS utensils, which were subsequently exported by AEPL. The Department investigated the allegation that AEPL were claiming Cenvat credit by fraudulent means on the basis of invoices against which no goods were actually received by them. AEPL were also reported to be purchasing goods from the open market and export the same by showing them as their manufactured product. 2. AEPL were purchasing raw material mainly from RM which was a partnership firm wherein the partners were Ms. Mitlesh, wife of Shri Ishwar Singh Choudhary and Shri Sandeep, Nephew of Shri Ishwar Singh Choudhary. RM sold their entire goods exclusively to AEPL after purchasing the entire goods from two parties viz. M/s Metal Tube India (MTI) as well as M/s Shri Sundar Steel Pvt Ltd. (SSPL), Mumbai (SSPL). Both MTI as well as SSPL were stockists of M/s Jindal Stainless Steel, Hissar,Haryana. RM received the entire goods from Mumbai through the transporter M/s Sai Sidhi Freight and Movers, Mumbai (SSFM), which was owned by Shri Dinesh Chabda. 3. The Department un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....i but had allowed Shri Ishwar Singh Choudary to issue GRs by collecting a commission of Rs. 200 - Rs. 500. Accordingly, it is to be concluded that the goods were never transported from Mumbai to AEPL, Delhi. ii. Most vehicles whose nos. have been indicated in the invoices of RM have been founded to be non existing in the records of transport authorities. Accordingly, it is to be concluded that such goods never moved from RM to AEPL, accompanying in the invoices. On this basis, Cenvat credit amounting to about Rs. 62 lakhs availed by AEPL on the basis of invoices issued by RM is fraudulent and is required to be recovered. iii. Goods have also been procured by AEPL from a few other local dealers based in and around, Delhi. Verification of the registration nos. of vehicles shown in their invoices also revealed that many such vehicles were incapable of carrying the goods shown in the invoices. The statements recorded from the owners of such vehicles also confirmed that these vehicles were never used for transportation of goods to AEPL on the dates of the invoices. Consequently, it is to be concluded that AEPL has availed cenvat credit fraudulently on the basis of invo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eels Ltd. 2008(230) E.L.T. 218(P& H). iv. Royal Industries Vs. Commissioner of C. Ex, Chandigarh-I 2016(342) E.L.T. 135(Tri.- Chan.) 11. The ld. DR supported the impugned order. He argued that the goods in the nature of inputs procured by AEPL could not have travelled from M/s. Jindal Stainless Steel in Harayana all the way to Mumbai and then travel back to appellant's factory in Delhi. This basic fact has further been supported by the investigation carried out by Revenue which has established that the transporter SSFM whose GRs have accompanied the consignments from Mumbai to Delhi have been found to be dummy. Only GRs have been made use of in the name of transporter. Accordingly, it is to be concluded that no goods were received by RM in Delhi from the suppliers in Mumbai. Verification of vehicle nos. shown in the invoices of RM as transport vehicles to AEPL were found to be non existing and scrapped vehicles. Accordingly, it is evident that no goods were received by AEPL, but only invoices were received which were used to avail Cenvat credit fraudulently. He submitted that the Cenvat credit availed fraudulently is required to be recovered as has been done by the impu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hen the goods had not been delivered by the dealer, i.e. M/s. MTI Mumbai, the question of passing on the CENVAT to the main notice by M/s. Ronik Metals, Delhi does not arise. The main Noticee cannot take the shelter under the plea that they had purchased the goods from the Registered Dealer i.e. M/s Ronik Metals, Delhi. The registered dealer M/s. Ronik Metals were required to prove that they had received the goods with the cenvitable invoices. They in the instant case, failed to produce any documentary evidence to prove that the goods in question, purchased from Mumbai were actually received by them. The allegation of the department that the transport company M/s. SSFM, Mumbai had not transported any goods through their company or through any other transporter stands proved. Therefore, I hold that M/s. Ronik Metals, committed fraud in passing on the Cenvatable invoices to the main notice when the goods were not received." 16. Consequently, the invoices issued by RM for further transmitting the cenvat credit to AEPL are not valid documents for availing credit. 17. The investigation undertaken by the Department into the vehicles numbers indicated by RM in the invoices issued in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tage dealer or a second stage dealer. Similar provisions were stipulated in the Central Excise Rules, 2001 and also the Central Excise Rules, 1944 to the same effect. 73.3 The Cenvat Credit Rules, 2004, deal with the procedure relating to availment of credit. As per Rule 3, a manufacturer or a producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as Cenvat credit) of the duties specified therein paid on any inputs or capital goods and received by the manufacturer for use in or in relation to the manufacture of final products. Rule 4 of the said Rule stipulates that Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Rule 9 of Cenvat Credit Rules, 2004 deals with the documents and accounts on the basis of which the Cenvat credit can be taken and this includes an invoice issued by a manufacturer, an importer, a first stage dealer or second stage dealer. Sub-rule (2) further stipulates that no Cenvat credit shall be taken unless all the particulars as prescribed under the Central Excise Rules, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e has taken Cenvat credit are goods on which appropriate duty of excise as indicated in the document accompanying the goods has been paid and the manufacturer shall be deemed to have taken reasonable steps if he satisfies himself about the identity, name and address of the manufacturer/supplier issuing the document specified in the said Rule either from his personal knowledge or on the strength of a certificate given by a person with whose handwriting or signature he is familiar with or on the strength of a certificate issued to the manufacturer or supplier by the jurisdictional Superintendent of Central Excise." 20. While discussing the evidence in light of the above statutory provisions, the Tribunal held as follows: "74.2 The contention of the appellants is that the delivery in these cases were arranged by the dealers themselves and the freight was pre-paid. Discrepancy occurred due to entering of incorrect numbers of the transport vehicles by the dealer as admitted by the dealer. The appellants have received the scrap from the dealer and this fact is not in dispute and they have made payments for these scrap and they have also accounted for the receipt of the scrap ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d at the relevant time, the onus is on the manufacturer who avails credit to show that he is entitled for the credit. Inasmuch as the appellant-assessees have not discharged this onus, it would be reasonable to conclude that the appellants are not eligible for or entitled to the Cenvat credit covered by these invoices." 21. Bulk of the Cenvat Credit has been availed by AEPL on the basis of the invoices issued by RM. However, as discussed above, RM was required to prove that they have received the goods accompanying the Cenvat Credit invoice which they have failed to establish. 22. It has been contended that the Cenvat Credit should not be denied for the reason that all particulars required are not indicated in the accompanied invoices. This plea has been discussed by the Adjudicating authority as follows: "59. The further contention raised by the Ld. Counsel on behalf of the main noticees, i.e. noticees no.1&3 that the Cenvat Credit of Rs. 1,89,845/- should not be denied in terms of Rule 9(2) of Cenvat Credit Rules, 2004 on the ground that the documents mentioned in sub-rule (i) did not contain all the particulars, as the lapse occurred due to the fault of the suppli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iolation of provisions of Rule 9 of Cenvat credit rules 2004, and the failure on the part of the main notice for informing the jurisdictional Asstt. Commissioner at the time of receipt of the invoices and before taking the Cenvat Credit, I cast aside the plea of the Ld. Counsel that it happened due to oversight and the same was a bonafide error." 23. Invoice stipulated in Rule 11 of the Central Excise Rules is not only the assessment document but also the transportation document. If the particular statutorily prescribed in the invoice are found to be untrue then the irrebuttable presumption arises about the genuineness of the document and the transaction. Cenvat Credit stands availed by AEPL on the basis of invoices issued by various dealers. In respect of RM, the investigation by Revenue at the end of transporter SSFM has established that no goods moved from Mumbai to RM. The entire supply of RM is shown only to AEPL. Further, most of the vehicles whose numbers are indicated in the invoices of RM have been found to be none existent in the records of transport authorities. Consequently, it is to be held that the particulars given in the invoice regarding the vehicle numbers are ....