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2023 (7) TMI 824 - AT - Central ExciseCENVAT Credit - fake invoices - recovery of CENVAT Credit alongwith interest and penalties - HELD THAT - The facts which are not in dispute that appellant has taken Cenvat credit on the basis of invoices issued by M/s Agrawal Structure Mills Pvt Ltd for service provided to the appellant and appellant has taken Cenvat credit of service tax paid by M/s Agrawal Structure Mills Pvt Ltd although late. In that circumstances, the appellant has correctly taken the Cenvat credit on the invoices issued by M/s Agrawal Structure Mills Pvt Ltd, therefore, no proceedings is sustainable against the appellant. Appeal allowed.
Issues Involved:
- Appellant taken Cenvat credit on the basis of fake invoices - Entitlement to Cenvat credit amounting to Rs. 29,02,989/- - Imposition of penalty under Section 11AC of the Act r/w Rules 15(2) of the Cenvat Credit Rules, 2004 The appellant, a manufacturer of various goods, availed Cenvat credit on input/services during their activity. An audit revealed that the appellant took credit on invoices from a commission agent, M/s Agrawal Structure Mills Pvt Ltd, without service tax being paid. A show cause notice was issued, dropped initially but reinstated by the Commissioner (Appeals) for recovery of Cenvat credit, interest, and penalty. The appellant challenged this order. The appellant's counsel argued that since the commission agent paid service tax on the invoices, the appellant should not be denied Cenvat credit. It was contended that the appellant took credit in good faith based on the agent's invoices, and if the agent paid the tax, the appellant should not be penalized. The counsel sought to set aside the Commissioner (Appeals) order. On the other hand, the authorized representative supported the impugned order's findings that the appellant used fake invoices to claim Cenvat credit for services not received. After hearing both parties and reviewing the records, it was established that the appellant correctly availed Cenvat credit based on the agent's invoices, even though the tax payment was delayed. Thus, the proceedings against the appellant were deemed unsustainable. Consequently, the impugned order was overturned, and the appeal was allowed with any necessary relief.
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