AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 1002
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....the Central Excise Department vide Invoice No.SKU/205/1213 dated 22.09.2012 and availed CENVAT Credit of Rs.92,660/- (including Cess). Show Cause Notice dated 27.01.2016 was issued on the ground that M/s. Sri Kamala Udyog has no existence and no plant and machinery are there in their declared premises and they are not performing any manufacturing activities. It is alleged that said M/s.Sri Kamala Udyog had undertaken only paper transactions and issued fake Central Excise invoices. Hence the CENVAT Credit availed by the assessee against the invoice issued by the alleged fraud manufacturer cannot be treated as CENVAT in terms of Rule 3 and the invoices are not proper documents under Rule 9(1)(a) of CENVAT Credit Rules, 2004 for availment of credit. So, the credit availed on the said documents are inadmissible and recoverable along with interest and penalty. Further, the Commissioner of Central Excise, Kolkata-IV Commissionerate issued an alert notice No.01/2013 dated 30.07.2013 confirming that M/s. Sri Kamala Udyog, Rishra has no existence. The executing authority disallowed credit of Rs.92,660/- and ordered for recovery along with interest and also imposed penalty of equal amount un....
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....le invoice which satisfies all the conditions of the Rule 9(1) of the CENVAT Credit Rules, 2004 i.e. the invoice of manufacturer/supplier, mentioning the name of the supplier, factory and place of removal, Central Excise Registration Number, Range Office address, Division office address, Commissionerate, VAT and CST Number, PAN, date and time of preparation of invoice, date and time of removal, mode of transportation, Registration Number, Central Excise Tariff Item, description of goods, quantity, rate per unit, total value, Excise duty and other Cesses, CST and declared Excise duty payable (in words), confirming to the requirement under Rule 11 of the Central Excise Rules, 2002 read with Rule 9 of the CENVAT Credit Rules, 2004. Further, the goods transferred from the dealer to the Appellant are under the cover of way bill in Form-VAT-402 issuing/approving office i.e. Mayurbhanj Circle of the State Tax Department generated electronically. The payment to the dealer supplier was made through banking channels. On receipt of the goods, necessary entry has been recorded in the entry book of Duty Credit Register and account of Raw Material and Components Register. Input goods received ha....
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....ayment from the buyer in respect of goods supplied including excise duty, action should not be initiated against him under Section 11D and 11DD and CENVAT Credit should not be denied to the assessee. 10. I find that the Hon'ble Allahabad High Court in the case of Commissioner of Central Excise, Csutoms & Service Tax Vs. Juhi Alloys Ltd. [2014 (302) E.L.T. 487 (All.)] held that the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken CENVAT Credit were goods on which appropriate duty of excise was paid. Once, it is demonstrated that reasonable steps had been taken which is a question of fact in each case it would be contrary to the Rule to cast impossible and impractical burden on the assessee. The relevant paragraphs are reproduced for ready reference:- "3. This view has been affirmed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (in short 'the Tribunal') in its judgment. The Tribunal has found that the revenue has not disputed that the supplier from whom the assessee received the raw materials [MK Steels (P) Ltd.] has raised dealers invoices giving all the particulars required to be furnished in law. Moreover, it ....
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.... of excise or service tax as indicated in the documents accompanying the goods or relating to input service, has been paid." 5. The Explanation to Rule 9(3) of the Rules of 2004 provides a deeming fiction where a manufacturer or producer of excisable goods who takes Cenvat credit on inputs, would be deemed to have taken reasonable steps, if he satisfies himself about the identity and address of the manufacturer or supplier or provider of input services, as the case may be, issuing the documents specified in sub-rule (1) on the basis of his personal knowledge or on the basis of a certificate given by a person with whom he is familiar or on the basis of a certificate issued to the manufacturer or the supplier by the Superintendent of Central Excise concerned. In other words, the Explanation to Rule 9(3) provides a deeming definition as to when a manufacturer or a purchaser of excisable goods would be deemed to have taken reasonable steps. However, even in a situation where Explanation to Rule 9(3) is not attracted, it would be open to an assessee to establish independently within the meaning of the substantive part of Rule 9(3) that he had in fact taken reasonable steps. Whether an....
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....oes not indicate that any contrary view of the law has been taken. 8. Ultimately, the issue in each case is whether, within the meaning of Rule 9(3) of the Rules of 2004, the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken Cenvat credit were goods on which appropriate duty of excise was paid. Once it is demonstrated that reasonable steps had been taken, which is a question of fact in each case, it would be contrary to the Rules to cast an impossible or impractical burden on the assessee. For the aforesaid reasons, these appeals do not give rise to any substantial question of law. They are, accordingly, dismissed." Once a buyer of inputs receives invoices of excisable items, unless factually it is established to the contrary, it will be presumed that when payments have been made in respect of those inputs on the basis of invoices, buyer is entitled to assume that the excise duty has been/will be paid by the supplier on the excisable inputs. The buyer will be therefore entitled to claim CENVAT Credit on the said assumption. It would be unreasonable and unrealistic to expect the buyer of such inputs to go and verify all the supplier or....