2018 (10) TMI 81 - AT - Central Excise

CENVAT credit - allegation of fraud and tampering of evidence is raised against the appellant - section 73 of the Indian Evidence Act. Held that - As per section 73 of the Indian Evidence Act comparing of handwriting and signature can be done by a court but even such requirement would not arise in the instant case since to a man of ordinary prudence two different handwriting are visible in those two bills and it appears that labour charges have been purposefully inserted in the bills to cover the services availed under the Cenvat Credit Rules - Going by the unethical practice adopted by the appellant it can be said that the same would amount to fraud within the definition of IPC. The documentary evidence produced before the Court have no connection on the actual transactions made by the appellant but those appear to have been are created for the purpose of meeting the requirement of law - fraud established - Appeal dismissed.

Summary

Issues:
Dispute over availment of cenvat credit of service tax paid on five items by the manufacturing company leading to denial of credit, challenge against duty demand, interest, and penalty invoking extended period.

Analysis:
1. The appellant company's dispute revolved around the denial of cenvat credit on service tax paid for various services. The order-in-original disallowed a portion of the credit, leading to a duty demand against inadmissible credit, interest, and penalty. The services in question included invoices raised in the name of the head office, labor services for machinery shifting, AMC for maintenance of various equipment, garden services, housekeeping, and civil activities.

2. The appellant, during the appeal, presented case laws supporting their cenvat credit claims and provided sample invoices to justify labor charges for machinery shifting. They argued for the admissibility of services like maintenance of AC based on previous decisions. The Commissioner (Appeals) allowed credit for gardening services but confirmed duty demand for other services.

3. The department argued that the appellant did not follow the required distribution pattern as an input service distributor, leading to the denial of credit. They raised objections to the authenticity of the evidence presented by the appellant, alleging fraud in the bills related to labor charges for machinery shifting. The department contended that the appellant's claims regarding renovation and modernization of the factory were not directly related to the input availed.

4. The tribunal examined the sample invoices provided by the appellant and found discrepancies indicating potential fraud. Handwriting variances in the bills and endorsements on purchase orders raised doubts about the authenticity of the evidence. The tribunal highlighted the unethical practices of the appellant, suggesting potential fraud as per legal precedents.

5. Citing legal precedents emphasizing the importance of truthful representation in court proceedings, the tribunal concluded that the appellant's actions amounted to fraud. Referring to relevant judgments, the tribunal dismissed the appeal and confirmed the order passed by the Commissioner (Appeals) regarding the denial of cenvat credit.

In conclusion, the tribunal upheld the decision to deny cenvat credit based on the fraudulent practices observed in the appellant's case, emphasizing the importance of integrity in legal proceedings and affirming the order passed by the Commissioner (Appeals).