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2013 (2) TMI 81 - AT - Central ExciseCenvat credit of duty paid on the inputs denied - MS ingots used in the manufacture of their final products - Held that - Credit cannot be denied on the ground that manufacturer of the goods has not paid the duty where the inputs stand received on the basis of valid documents and after taking all the reasonable precautions. In case invoices contained all the particulars and credit has been availed on bonafide belief, the denial of credit on the ground that dealer has not received the goods in accordance with the law, is neither just nor fair. See Prachi Leather vs. CCE 2005 (3) TMI 249 - CESTAT, MUMBAI , Haryana Vidut Prasaran Nigam Ltd. Vs. CCE 2004 (1) TMI 129 - CESTAT, NEW DELHI , Varanasi Domestic Appliances (P) Ltd. Vs. CCE 2007 (2) TMI 484 - CESTAT, NEW DELHI ,Bhuwalka Steel Industries Ltd. Vs. CCE 2006 (11) TMI 494 - CESTAT, MUMBAI , CCE vs. SPIC Pharmaceuticals Division 2006 (2) TMI 335 - CESTAT, CHENNAI and R.S. Industries vs. CCE 2002 (11) TMI 169 - CEGAT, NEW DELHI - in favour of assessee.
Issues:
1. Availment of Cenvat credit based on fake invoices. 2. Allegations of non-existence of suppliers. 3. Confirmation of demand, imposition of penalties, and challenge before Commissioner (Appeals). 4. Commissioner (Appeals) decision in favor of the respondent. 5. Impugning the Commissioner (Appeals) decision before the Tribunal. 6. Tribunal's analysis and reference to relevant case laws in upholding the Commissioner (Appeals) decision. Issue 1: The case involved the availment of Cenvat credit by the respondents based on fake invoices issued by a non-existent supplier. The investigations revealed discrepancies in the invoices and the non-existence of the suppliers mentioned, leading to the initiation of proceedings against the respondents. Issue 2: The allegations against the respondents included receiving goods from a non-existent supplier, which raised doubts about the legitimacy of the Cenvat credit availed by them. The original adjudicating authority confirmed the demand and imposed penalties on the respondents and their authorized signatory. Issue 3: The respondents challenged the order before the Commissioner (Appeals), presenting arguments supported by trade tax forms and statutory records to demonstrate the procurement and utilization of the goods in question. The Commissioner (Appeals) accepted the respondents' contentions and ruled in their favor, emphasizing the steps taken by the respondents in good faith. Issue 4: The order of the Commissioner (Appeals) was then challenged before the Tribunal by the revenue. The Tribunal analyzed the case, considering various Tribunal decisions and upheld the Commissioner (Appeals) decision, emphasizing that credit cannot be denied solely on the grounds of the manufacturer not paying duty if the inputs were received based on valid documents and reasonable precautions were taken. Issue 5: The Tribunal rejected the revenue's appeal, citing the detailed order passed by the Commissioner (Appeals) and the adherence to Tribunal decisions supporting the respondents' position. The Tribunal found no reason to interfere with the Commissioner (Appeals) decision, ultimately upholding it. In conclusion, the Tribunal upheld the Commissioner (Appeals) decision in favor of the respondents, emphasizing the importance of valid documents and reasonable precautions in availing Cenvat credit, despite allegations of fake invoices and non-existent suppliers. The Tribunal's decision was supported by references to relevant case laws and established principles in similar cases.
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