TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 1066
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....ed of by this common order. 2. The brief facts of the case are that the appellants herein are the manufacturers/dealers and are availing the CENVAT Credit on the inputs/goods under the provisions of CCR 2004. The appellant in E/25306/2013 viz; M/s Reliance Cellulose Products Ltd. are engaged in manufacture of Sodium Carboxy Methyl Cellulose, Micro Crystalline Cellulose Products falling under Chapter 39. On intelligence gathered that they are fraudulently availing CENVAT Credit based on CENVAT invoices issued by certain registered Central Excise Dealers without actual supply of material, simultaneous search operations were conducted by Officers of DGCEI on 29.09.2010 at the factory premises of M/s Reliance Cellulose Products Ltd., M/s Y M D....
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....CENVAT credit eventhough they did not receive the goods namely Micro Crystaline Cellulose powder from M/s Finechem. Enquiry made with M/s Finechem showed that they neither received MCC from M/s Y M Drugs and Pavan Drugs nor supplied the same to M/s Reliance Cellulose Products Limited. The alleged transactions can be diagrammatically represented as below: 4. Since the goods as shown in the duty paying documents were not supplied by the dealers, the usage of the same by M/s Y M Drugs or M/s Pavan Drugs or M/s Reliance Cellulose Products Limited in relation to manufacture of finished products is not possible and the CENVAT Credit in such cases where the inputs were not actually received or used in the manufacture of final products was not adm....
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....nst this order, the appellants filed appeal before Commissioner (Appeals) who vide the order impugned herein upheld the same. Hence, appeals E/27169/2013 and E/27170/2013. 6. On behalf of the appellant, Ld. Counsel Shri. S.Ravi and Shri V.J. Shankaraman appeared and argued the matter. It is submitted that there is no contravention of any provisions of CENVAT Credit Rules since there was no revenue loss in the transactions of issuing CENVAT invoices without supply of goods. Though there has been generation of invoices without supply of goods, since the cycle was completed at M/s Reliance Cellulose Products Limited only there was no detriment or jeopardy to the Revenue. During the months of February 2010 and March 2010, in order to show more....
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....e Chairman & Managing Director had clearly stated in their depositions that the above modus operandi was only to show more turnover in order to obtain loan from banks and there was no involvement of goods. The Micro Crystalline Cellulose powder was lying with M/s Reliance Cellulose Products Ltd. without movement and no goods were ever sent. The cycle of this fictitious movement was completed within a day or two. The appellants had adopted this method only to show more turnover and by doing so the appellants did not cause any loss to the Exchequer. There is no provision of law to demand the credit or impose penalties as there was no movement of goods at all. There is no allegation of clandestine clearance. The documents have not been misused....
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....availed CENVAT Credit along with interest and also the penalties imposed are legal and proper. With regard to the appeal filed by the Managing Director, the Ld. AR submitted that the Managing Director had complete knowledge about the fraudulent availment of credit. He was also instrumental in issuing the said invoices and therefore the penalty imposed on the Managing Director is quite reasonable to the gravity of the offence. 9. Heard both sides. 10. As narrated above, it is an undisputed fact that the appellants have availed credit on fictitious invoices. There was no movement of goods at all. As per Rule 3 of CCR 2004, credit can be availed on invoices issued by the manufacturer/dealers. The credit is eligible on the duty paid goods/inp....