TaxTMI 
TaxTMI 
2025 (7) TMI 218
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....agreement with ZEE Entertainment Enterprise and Prisom TV Pvt. Ltd., the appellant produces uninterrupted TV serials and requires various support services from different service providers for smooth operations. These include video equipment hire, set preparation & maintenance, decorator charges, generator and makeup van hire, audio equipment hire charges, costume hire charges, location hire charges, light hire charges, transport hire charges, labour hire charges, iron man hire charges, dresser hire charges, security guard services, production assistant services, and sweeper services, etc. 2.1. Based on intelligence received from the Director General of GST Intelligence, Kolkata Zonal Unit, an investigation was initiated against the appellant. The investigation revealed that two persons, namely, Shri Kamal Kumar Jain and Shri Deepak Upadhyay, through their fraudulent activities as entry providers, had generated bogus sales/purchase bills for a large number of shell companies which did not exist in nature. The Revenue was of the view that the appellant had availed fraudulent CENVAT Credit on the basis of such bogus bills/invoices issued by nonexistent shell companies. 2.2. On 0....
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.... • The parties used to transfer amounts in bank account of his companies and the same amount was transferred to other entries being his own companies or to bank accounts of suppliers from whom corresponding ITC was taken by purchase bogus invoices • He was involved in fraudulent activities by way of creating bogus bills in name of M/s. Culminating Project Private Limited as service provider • He concentrated on areas like "transport bill, purchase bill, professional bill, commission bill, etc." 2.6. Based on the investigation findings, a Show Cause Notice dated 24.07.2020 was issued to the appellant proposing to: - (i) Demand CENVAT Credit of Rs. 13,07,441/- (including Education Cess and Secondary & Higher Education Cess) under Section 73(2) of the Finance Act, 1994 by invoking (ii) Impose penalty under Section 78(1) of the Finance Act, 1994 read with Rule 15(3) of the CENVAT Credit Rules, 2004 2.7. The said notice was adjudicated by the Ld. Deputy Commissioner vide Order-in-Original No. 20/Subhankar/CGST & CX/Tollygunge Division/KolSouth/20-21 dated 15.12.2020, confirming the demand. 2.8. On ap....
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.... 1165 - CESTAT Mumbai] • Royal Sundaram General Insurance Company Ltd. v. Commissioner [2024 (8) TMI 92 - CESTAT Chennai] 3.2.1. The appellant also submits that the principle that an innocent buyer/service recipient cannot be penalized for the fraud of the supplier has been consistently upheld by the Tribunal when the recipient has acted in good faith. Further, they submit that it is also settled that once the supplier has raised invoices charging Service Tax and the appellant has paid Service Tax to the supplier, the credit at the recipient's end cannot be denied without opening the assessment at the supplier's end, which is clearly absent in the present case; thus it is contended that the impugned Order is liable to be set aside on this ground itself. 3.3. Without prejudice to the above submissions and assuming without admitting that Mr. Kamal Kumar Jain was involved in any fraudulent activities, the appellant submits that it is crucial to note that as per the Department's own case and the statement recorded on 20.02.2020, Mr. Kamal Kumar Jain was the Director of M/s. Culminating Project Pvt. Ltd. only till 31.10.2014; the period of dispute in the present c....
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....ain and others recorded during investigation; however, they contend that these statements have no evidentiary value as they were not examined in terms of Section 9D of the Central Excise Act, 1944; the Department cannot build its case solely on uncorroborated statements without following proper legal procedures for recording evidence and hence, the impugned Order is liable to be set aside on this ground also. 3.6. The appellant categorically submits that there is no suppression of facts or intention to evade payment of service tax; all transactions were duly recorded in their books of accounts which were open to inspection by the department at any time. In this regard, they also pointed out that they had been filing regular service tax returns declaring all their transactions; that the CENVAT Credit availed was duly reflected in their returns and there was complete transparency in their operations. It is the appellant's contention that the impugned order has not provided any specific finding or evidence to establish that there was a suppression of facts or intention to evade payment of service tax or connivance by the Appellant recipient; therefore, in the absence of such findin....
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.... for the fraud of the supplier has been consistently upheld by the Tribunal when the recipient has acted in good faith. Further, it is also settled that once the appellant, being the service recipient, has paid Service Tax to the supplier on the invoices raised, the credit at the recipient's end cannot be denied without opening the assessment at the supplier's end, which is clearly absent in the present case. 6.3. The statement recorded on 20.02.2020, Mr. Kamal Kumar Jain was the Director of M/s. Culminating Project Pvt. Ltd. only till 31.10.2014. The period of dispute in the present case is from October 2014 to March 2015, with the Appellant having availed CENVAT Credit in February 2015 and March 2015. Therefore, even if the Department's allegations against Mr. Jain are taken at face value (which is vehemently denied), his directorship had already ceased before the substantial transactions took place. The alleged fraudulent intent or activities of a person who was no longer associated with the company at the time of rendering services cannot be imputed to vitiate genuine transactions that occurred months after his departure. 6.4. I observe that the impugned order r....
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....Finance Act, 1994 as held by the Hon'ble Punjab & Haryana High Court in the case of Ambika International Vs. Union of India reported in 2018 (361) ELT 90 (P& H), wherein the Hon'ble High Court held that the statements recorded during the course of investigation, have no evidentiary value unless and until tested in terms of Section 9D of the Central Excise Act 19.44. In that circumstances, the said statements cannot be the basis to deny the cenvat credit to the appellant. 13. We further take note of the facts that the cenvat credit was taken by the appellant on 14.03.2016, which has been duly reflected in their Books of Account as well as in their ST-3 Returns. In that circumstances, the show-cause notice issued to the appellant is highly barred by limitation. In that circumstances, the appellant succeeds on limitation also. 14. In view of the above, we hold that the cenvat credit cannot be denied to the appellant on merits as well as limitation. Consequently, no penalty can be imposed on the appellant. 15. In view of this, we set aside the impugned order and allow the appeal with consequential relief, if any." 6.7. A similar view has also been ....
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....ntral Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 9. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts. 10. Once the ambit of Section 9D(1) is thus recognized and understood, one has to turn to the circumstances referred to in the said sub-section, which are contained in clauses (a) and (b) thereof.....
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.... 14. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the Gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory. 15. The rationale behind the above precaution contained in clause (b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded befor....