2017 (9) TMI 860 - AT - Central Excise

CENVAT credit - duty paying invoices - fake invoices - H.R. Trimmings & other secondary products - Held that - in the case of Amar Ispat Pvt. Ltd., Sandeep Garg, Mohammad A. Master, Mohsin Hajibhai Memon, Harikrishna B. Soneji, Ram Awatar Agarwal & Diamond Roadways Versus Commissioner of Central Excise, Thane-I 2015 (11) TMI 373 - CESTAT MUMBAI , the facts and evidences and modus operandi in the present case are more or less same in these decisions therefore the ratio of the aforesaid decisions are squarely applicable in the present case, where The appellants could not produce copy of the Gate register, goods receipt note or LR or even any document evidencing payment of freight charges to the driver/transporter in respect of each invoice, and the credit denied - Therefore it is established that the appellant have availed Cenvat credit fraudulently without receipt of the goods. Credit rightly disallowed - appeal dismissed - decided against appellant.

Issues Involved:
1. Fraudulent availing of Cenvat Credit
2. Non-receipt of goods
3. Evidence of transportation and receipt of goods
4. Denial of cross-examination
5. Limitation and penalty

Issue-wise Detailed Analysis:

1. Fraudulent Availing of Cenvat Credit:
The appellants were accused of availing Cenvat Credit on invoices issued by M/s. Jindal Iron & Steel Co. Ltd. and M/s. Jindal Steel & Alloys Ltd. without actually receiving the goods. The investigation revealed that the goods mentioned in the invoices were delivered to different parties, not the appellants. The Tribunal upheld the findings of the lower authorities, confirming that the appellants fraudulently availed Cenvat Credit without receiving the materials.

2. Non-receipt of Goods:
It was established that the goods covered by the invoices were not received by the appellants. The investigation showed that the goods were delivered to parties in Viramgam instead of the appellants' factory. The appellants failed to provide any evidence of receiving the goods, such as gate registers, goods receipt notes, or lorry receipts. The Tribunal noted that payment through banking channels does not prove the genuineness of the transactions in such manipulated cases.

3. Evidence of Transportation and Receipt of Goods:
The Revenue presented substantial evidence, including transporters' records and statements from various individuals, proving that the goods were transported to locations other than the appellants' factory. The Tribunal highlighted the absence of any documentation from the appellants to contradict the Revenue's claims, reinforcing the conclusion that the goods were not received by the appellants.

4. Denial of Cross-examination:
The appellants argued that they were denied the opportunity to cross-examine witnesses, which they claimed was a violation of natural justice. The Tribunal dismissed this contention, stating that the appellants did not produce any evidence to contradict the Revenue's claims. The Tribunal cited previous judgments, noting that the denial of cross-examination did not prejudice the appellants' case, as they failed to provide any evidence of receiving the goods.

5. Limitation and Penalty:
The appellants contended that the demand was time-barred. However, the Tribunal rejected this argument, stating that the case involved clear fraud, and the extended period of limitation was applicable. The Tribunal upheld the penalties imposed by the lower authorities, emphasizing that the appellants availed Cenvat Credit without receiving the goods, constituting a fraudulent act.

Conclusion:
The Tribunal dismissed the appeals, confirming the findings of the lower authorities. It was established that the appellants fraudulently availed Cenvat Credit without receiving the goods, and the substantial evidence presented by the Revenue supported this conclusion. The Tribunal upheld the penalties and rejected the appellants' arguments regarding the denial of cross-examination and the limitation period. The appeals were dismissed in toto.

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