TaxTMI 
TaxTMI 
2018 (12) TMI 1164
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....5 MT in the manufacture of goods. Demand for reversal of cenvat credit has been raised on the balance quantity of 1685.696 MT of steel items, by taking a view that the cenvat credit availed was not admissible. 2.2 M/s Bhawani is a body builder mainly doing body building activities for M/s Tata Motors. They sometimes received duty paid chassis on which body was built and cleared on payment of duty. In certain other cases, they have received chassis on which no cenvat credit is taken and after building body, it is cleared on payment of only on the body. For use in the manufacture, they have procured various types of steel metal, like, plates, HR/CR Coils, sheets etc. and availed cenvat credit. The team of Central Excise Officers visited the factory of M/s Bhawani on 02.03.2006 and noticed that in respect of two invoices, credit was availed on the basis of photo copies of the invoices. On verification, the officers noticed that the goods accompanying the said invoices, were not received accordingly, took the view that the appellant was not entitled to avail cenvat credit on a total quantity of 76.920MT involving duty of Rs. 2,42,752/-. The Department proceeded to carry out further ....
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....ls were never received in the appellants' factory. 3. Show-cause notice dated 21.03.2007 on the above lines was issued proposing for denial of cenvat credit. 4. After conclusion of adjudication, the impugned order was passed demanding service tax totally amounting to Rs. 52,27,870/- including cess. The impugned order imposed penalty of equal amount of service tax as well as penalties on the various suppliers and transporters and two Directors of the Appellant Company. This order is assailed in these appeals. 3. Heard Shri Ravi Raghavan and Shri Deepro Sen, both Advocates, appeared on behalf of Appellant Nos.(1), (5) & (6) and Shri B.N. Chattopadhyay, ld. Consultant, appeared on behalf of Appellant Nos.(2), (3) & (4). 4. The demand for reversal of cenvat credit as well as imposition of penalties have been challenged mainly on the following grounds : (i) In respect of two invoices, on which cenvat credit was denied, it is submitted that the goods involved in those two invoices were returned to supplier having been found faulty. But the cenvat credit involved therein was reversed by the appellant. (ii) Design and drawings supplied by M/s Tata Motors were to be used a....
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....350.000 7. Material used in plant maintenance 91.070 8. Material returned to PPG which has been taken in purchase by DGCEI 35.630 9. Material not received by Chinar which has been taken in purchase by DGCEI 41.290 Total 1685.695 (vii) He also submitted a Chartered Accountant's Certificate issued by S.K.Naredi & Co. dated 31.10.2018, certifying that the invoice quantity supplied by the Company of various products during the period of dispute along with the consumption of materials in the manufacture of such goods. On the basis of the above arguments, he submitted that the cenvat credit cannot be denied and prayed that the demand as well as the penalty may be set aside. 5. Shri B.N. Chattopadhyay, ld. Consultant, strongly oppsed the penalties imposed on the various suppliers. It is his submission that all the purchasers were genuine and payment for such purchases were made by M/s Bhawani through Cheques. He made the point that the period of dispute was from 2002-03 to 2005-06 and penalties have been imposed on the suppliers in terms of Rule 26 of the Central Excise Rules, 2002. He specifically pointed out that the provisions for imp....
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.... the supplier, M/s Tata Motors, had supplied the design and drawing to the appellants. This also contained a bill of materials required for the fabrication of such body. During the course of investigation, the Department has considered such bill of materials supplied by Tata Motors as a reference and has attempted to evaluate the actual consumption of materials by the appellants in the fabrication of various models of vehicles. The investigation led to the conclusion that the appellants have shown consumption of materials in excess of materials as per bill of materials supplied by Tata Motors. This became the basis for the prima-facie conclusion of Revenue that the appellant has shown as consumed more materials than what was required for fabrication of chassis. 8.2 On the basis of prima-facie conclusion as above, the investigations were further conducted to establish the non-receipt of the materials in respect of some of the invoices based on which the cenvat credit were availed. The investigation highlighted some of the apparent discrepancies including the following : (i) Some of the invoices were of HR/CR Coils in addition to sheets. It was found that the appellants did not....