TaxTMI 
TaxTMI 
2023 (9) TMI 16
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.... was noticed that the assessee had availed and utilized CENVAT credit on the basis of invoices issued by various dealers / merchants / manufacturers/weavers of grey fabrics. According to the department, on an inquiry it was revealed that the petitioner had availed CENVAT credit amount of Rs. 15,40,481/during the said period, on the strength of invoices issued by fake/bogus/non-existing units. A show cause notice was accordingly issued. After the remand proceedings and after giving an opportunity of personal hearing, by the impugned order, the respondent no. 4 found that the case of the petitioner was not the same as the one settled by the judgement of this Court in case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. v. Union of India reported in 2013 (290) E.L.T. 61 (Guj.). According to the department, in the instant case, though grey fabric manufactures were registered with the Central Excise, they were found to be fake, bogus and non-existent. In the investigation so conducted, according to the department, when it was found that the dealers were fake, the burden of proof that they existed, shifted on the person against whom the allegations were made and therefore in the opinion o....
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....or of the order are read, especially from paragraph no. 14 onwards, it is evident that the facts of the present case and that in the case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. (supra) are entirely different. He would submit that a finding of fact has been recorded. That it has been established during the course of investigation carried out by the department and on the basis of ample evidence, it has been brought on record to substantiate the fact that grey fabric/manufacturers/suppliers were fake and bogus and in fact, they did not manufacture any grey fabric but had shown the same on paper and it was for the petitioner to prove, which he had failed to do by any evidence to suggest that the suppliers of grey fabric were in existence. Moreover, unlike the case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. (supra), the petitioner had never challenged the alert circulars issued by the department and therefore the invoices issued by such suppliers were rightly considered as fake in absence of evidence to the contrary. 4.4 That this Court will not enter into appreciation of finding of facts. The authority based on factual aspects has passed an order appreciating the evidence ....
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....004 whereas the show cause notice was issued in April 2009. Therefore, the demand is barred by limitation. The High Court in the case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. (supra) upheld the provisions of Rule 7(2) with a rider that unless the holder in due course of the original documents alleged to have been generated by fraud, is a party to the fraud, the holder in due course cannot be proceeded against. 5.4 At this stage, it is necessary to discuss and consider the decision in the case of Prayagraj Dyeing & Printing Mills Pvt. Ltd.(supra). Before the Division Bench of this Court, Tax Appeals were filed arising out of a common order dated 24.01.2011 passed by the Central Excise, Customs and Service Tax Appellate Tribunal, Ahmedabad. It was the case of the appellant Prayagraj Dyeing & Printing Mills Pvt. Ltd. that they were enjoying deemed credit facility for the grey fabrics received from the traders. For taking credit, in accordance with Rule 7 of CENVAT Credit Rules, 2002, the manufacturer could take such credit on the basis of the document such as an invoice issued by a manufacturer and importer etc. The explanation to the Rule indicated that the manufacturer produc....
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....nufactured may pass through various chains of purchasers before they reach another manufacturer who may use the same as input. In these cases, it is not even in dispute that the original manufacturer who manufactured grey fabrics was actually registered with the Central Excise authority. Such manufacturer filed returns and the purchaser was a merchant-manufacturer. The purchaser, then, sent those goods to the present appellants for carrying out job work and the present appellants have taken credit which is sought to be reversed by the Central Excise on the ground that the original manufacturer cannot be found. 8. Therefore, the question that falls for determination is whether the department can escape its liability to find out a person who was registered with them and to pursue him for payment of duty. There is also no dispute in these cases that the goods were purchased by the merchant manufacturer officially and they have suffered the duty thereon and the amounts have been paid through cheques. 9. It is also not a case where the invoices are manufactured documents not signed by the original manufacturer. The invoices which are accounted for in the Return of the person, were t....
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....of excise is primarily a duty levied on a manufacturer or purchaser in respect of a commodity manufactured or produced. As pointed out by a Division Bench of this Court in the case of Commissioner of Central Excise v/s D.P. Singh reported in 2011 (27) ELT 321, the judgment of the Supreme Court in the case of New India Assurance Company [supra], was distinguished, being one relating to a forged document which renders a document null and void, and as such, has no application to this type of cases. Similarly, reliance over the judgment of the Supreme Court in the case of Commissioner of Customs [Preventive] vs. Aafloat Textiles (I) P. Ltd. reported in 2009 (235) ELT 587, cannot be supported as Afloat case is one pertaining to a forged document but not in respect to a document otherwise genuine, issued by practising fraud. The facts stated in the case of Afloat indicated that the same was a case of a forged invoice and thus, the principles laid down therein cannot have any application to an invoice which is, otherwise, genuinely issued by a manufacturer registered with the Revenue. Justice Arijit Pasayat who delivered the judgment of the Supreme Court in the case of Afloat [supra], in ....