TaxTMI 
TaxTMI 
2024 (7) TMI 1252
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.... of Central Excise Intelligence, Jamshedpur [DGCEI], it was revealed that some first stage dealers working only on paper were passing on the cenvat credit on the basis of invoices, wherein the goods were shown to have been manufactured by such manufacturers, who were either not in existence or were not carrying on any manufacturing activities. Further investigation revealed that the second stage dealers based in Jaipur were issuing cenvatable invoices to M/s. Amar Pratap Steel Pvt. Ltd. (main noticee) [APSPL] without delivering the goods described therein, showing the goods to have been purchased from the first stage dealers and manufactured by non-existent or non-working manufacturers. The following chart shows the details of the manufactu....
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.... 47,86,056 2. The show cause notice dated 6.3.2018 was issued to all the above parties i.e. manufacturers, the first stage dealers and the second stage dealers with the main noticee as APSPL. On adjudication, the cenvat credit amounting to Rs.47,86,056/- was directed to be recovered from APSPL along with interest and penalty. On all other parties, penalties were imposed under Rule 26 of the Rules. In so far as the appellant herein is concerned, penalty of Rs.3,63,778/- was imposed. Being aggrieved, the appellant had preferred an appeal, which stands rejected by the impugned order. 3. I have heard Ms. J. Kainaat, learned counsel for the appellant and Shri Mahesh Bhardwaj, Authorised Representative for the respondent and ha....
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....uty, which was accepted by the department without any objection. When duty paid on finished goods is accepted then it leads to inevitable evidence of receipt of inputs and its use in the manufacture of finished goods. The receipt of raw material is impliedly admitted. 7.5 It is an established fact that the payment of full value of invoices has been made through banking channels and the department has not challenged the same. There is no case of any flow back of money, which must be there if the invoices were issued to the appellant without any goods. 7.6 I find that the appellant received material under the invoices and utilized consumed for the manufacture of final products on which duty had been paid. The case of the dep....
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....and the 2nd stage dealer. Thus the appellant has duly received the goods (Scrap) as mentioned in the impugned invoices after making payment of duty mentioned there on. 7.7 I find that it is settled proposition of law that proceeding based on statements of parties needs to be corroborated with some positive evidence to raise demand on an appellant. Thus, raising a demand in a proceeding solely on the basis of statements without any evidence corroborating such statements cannot be said to be sufficient, therefore, the demand becomes unjustifiable. I rely on the following case laws (i) Rama Jain Vs Commissioner of Cus. New Delhi 2016(333) E.LT. 127 (Tri. Del.) (ii) Ashok Kumar Aggarwal Vs. Commissioner of Customs (Prev.) Mumbai 2004 (....
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....ther, I find that managing huge quantity of raw materials from alternative sources seem impractical however the Department has not produced any evidence to reflect that the appellant has procured the raw material from some other alternative sources for the goods manufactured from the 'inputs' received against the 2nd stage dealer's invoices." 6. Thus, in the given factual situation of the case, categorical findings have been recorded by the Commissioner (Appeals) in the case of APSPL, particularly that APSPL had duly received the goods as mentioned in the impugned invoices after making payment of duty, there is no justification in taking a contrary view on the same fact, which have been accepted by the Department and no appeal has been f....
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....envat credit on the invoices. Balancing the two sides, we find that the issue tilts in favour of the appellant. When the department registered the so called 'non-existent manufacturers/dealers' and it cancelled registrations much later, after this investigation, the irresistible conclusion is that the officers had either fraudulently issued the registrations or they issued registrations believing that the manufacturers/traders existed and only much later came to know that they did not exist at all. There is no evidence or allegation of fraud by the officers, hence, it is reasonable to presume that they believed that the manufacturers/traders existed. Such being the case, the appellant cannot be faulted for also believing that the manufactur....