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TMI Blog2014 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction and the fake company. When the transactions between the petitioner and the supplier were found to be fake transactions and it was found that the petitioner has failed to establish and prove that the petitioner used the inputs / goods in manufacturing of even the goods which came to be exported on which the actual excise duty or paid, the petitioner shall not be entitled to the rebate of the duty, which is not proved to be paid. Decision in the case of D.P. Singh (2011 (3) TMI 1370 - GUJARAT HIGH COURT) distinguished - Decided against the assessee. - Special Civil Application No. 13932 of 2011 - - - Dated:- 2-7-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellant : Mr. Paresh M. Dave For the Respondents : Mr. Hariday Buch, Mr. R. J. Oza JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) 1. By way of this petition under Article 226/227 of the Constitution of India, petitioner has prayed for an appropriate writ, direction and order quashing and setting aside the impugned order No.270/2011CX dated 23.03.2011 passed by the Joint Secretary - Government of India by which the Revisional Authority confirmed the Order in Original passed by the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it has been noticed that number of persons who had obtained the registrations as manufacturers had issued hundreds of Central Excise duty paying invoices, without any movement of goods and infact no goods were sold by them. Based on such bogus duty paying documents, number of parties have claimed Cenvat Credit and part of which had found its way in rebate claims also. Considering a huge revenue involvement running in to Crores of rupees due to issue of fake/bogus excise invoices it was felt necessary that before sanctioning rebate claims inquiry should be made regarding genuineness of the manufacturer and the input invoices on which Cenvat Credit has been availed and duty paid. 5. Whereas it appears that M/s. Poddar Exports (India), S4, Sardar Palace, Sardar Market, PunaKunbharia Road, Surat (Exporter) has filed a rebate claim arising out on the exported goods, vide ARE1 No.9, dtd. 17052004, which is mentioned above. The exporter has purchased these goods from M/s. Raju Synthetics Pvt. Ltd. (now M/s. Hans Dyeing Printing Pvt. Ltd.) Plot No.184, Near Baleshwar Khadi, Tal.Palsana, Distt. Surat, who has purchased the goods from M/s. Om Textiles, 77, HariIchcha Society, Udhna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned orders passed by the Revisional Authority, Commissioner (Appeals) and the OIO rejecting the claim of ₹ 3,51,469/+ ₹ 1,98,432/submitted by the petitioner, the petitioner has preferred the present Special Civil Application under Article 226/227 of the Constitution of India. 3. Shri Paresh Dave, learned advocate appearing on behalf of the petitioner has vehemently submitted that all the authorities below have materially erred in rejecting the rebate claim of the petitioner of ₹ 3,51,469/+ ₹ 1,98,432/filed by the petitioner in respect of the ARE-1s. It is submitted that as such the petitioner had complied with all the requirements under the law more particularly under Rule 18 of the Rules, 2002 with respect to its rebate claims of ₹ 3,51,469/+ ₹ 1,98,432/. It is submitted that as the petitioner filed the necessary documents along with the respective ARE-1s with full particulars and complied with all the requirements which were required to be complied with under Rule 18 of the Rules, 2002, the authorities below have erred in rejecting the rebate claims of the petitioner. 3.1 It is further submitted by Shri Dave, learned advocate ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011(270) E.L.T. 321 (Guj.) Making above submissions and relying upon the above decision it is requested to allow the present special civil application and direct the respondents to pay / grant the rebate of ₹ 3,51,469/+ ₹ 1,98,432/with interest thereon under Section 11BB of the Act. 4. Present petition is opposed by Shri R.J. Oza, learned Counsel appearing on behalf of the Department. It is submitted that in the present case as such there are concurrent findings of facts by all the authorities below that infact there was no physical movement of the goods/inputs and the transactions between the petitioner and the supplier - M/s. Raju Synthetics Pvt. Ltd. were fake transactions. It is submitted that there are concurrent findings of fact by all the authorities below that the transactions between the petitioner and M/s. Raju Synthetics Pvt. Ltd. (Supplier) were only billing activities for the purpose of availing CENVAT Credit as well as the rebate. It is submitted that it has been found by all the authorities below that M/s. Om Textiles from whom M/s. Raju Synthetics Pvt. Ltd. is alleged to have purchased the goods was already declared nonexistent/ fake/bogus unit vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. At the outset it is required to be noted that petitioner submitted the rebate claim of ₹ 3,51,469/+ ₹ 1,98,432/on the goods exported by them under the ARE-1s, the particulars of which are mentioned in the show-cause notices at Annexure-A.The same have been denied by all the authorities below by observing that as such the transactions between the petitioner and its supplier were fake transactions and there was no actual and physical movements of the goods and the petitioner and the supplier indulged into the billing activities only for the purpose of taking benefit of CENVAT Credit and rebate. Therefore, as such there are concurrent findings of fact by all the authorities below with respect to the fake transactions between the petitioner and M/s. Raju Synthetics Pvt. Ltd. (supplier). At this stage it is required to be noted and it has come on record that the petitioner is alleged to have purchased the goods from M/s. Raju Synthetics Pvt. Ltd. (its supplier) who purchased the goods from M/s. Rangroop Texturiser, M/s. Om Textiles and M/s. Shree Ganesh Textiles. It has come on record that so far as M/s. Ganesh Textiles and M/s. Om Textiles are concerned, two purported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of excise invoices involving textile items have been issued in the name of fictitious unknown persons. In the wake of large scale scam, Commissioner of Central Excise, Surat-I has issued instruction No.08/2005 dated 03.02.05. These instructions clearly required verification of input invoices before sanction of claim of rebate with an object to identify genuine and non genuine cases. The Notification No.40/2001 CE(NT) dated 26.06.2001 issued under Rule 18 of the Central Excise Rules, 2002 requires the jurisdictional Assistant / Deputy of Maritime Commissioner (the rebate sanctioning authority) to satisfy himself that the claim is otherwise in order. It is only when the rebate sanctioning authority is satisfied as to the genuineness of the claim, the claim can be sanctioned by him. Power vested with the rebate sanctioning authority is discretionary power. The discretionary power is not unfeltered one and every discretionary power has to be exercised in good faith and in furtherance of object sought to be achieved. The very object of granting rebate is export promotion based on well recognized principle of export promotion that exports should not suffer taxes of exporting country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and ARE1 is as high as ₹ 1000/Kg. which is abnormal by any standards. 4.4 In its submissions dt. 19.12.2008 before me, the appellant has furnished copies of quarterly returns filed by M/s Om Textiles and M/s Shree Ganesh Textiles the two purported suppliers/Writer of invoices of grey fabrics. However the allegations are that these two parties are ake and fictitious. Mere filing of returns do not establish that the two parties are real. M/s Om Textiles appear at Sl. No.120 of the appendix II of the Alert Circular F. No.IV/12HPIUIII/ 9/0405 Pt. V dt. 03.05.2005 of the Commissioner of Central Excise, Surat-I declaring the said unit as fake and fictitious. Similarly M/s Shree Ganesh Textiles appear at Sl. No.56 of the Alert Circular F. No. IV/12HPIUIII/ 9/0405 Pt. V dt. 22.09.2005 of the Commissioner of Central Excise, Surat-I. None of the two have surfaced yet to challenge the alert Circulars which are in public domain. If indeed the two Units were genuine real or existing person, the appellant could have produced on affidavit from these parties to establish the transactions. In respect of M/s Shri Ganesh Textiles, M/s Ajay Textiles and M/s Rahul Textiles, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of this Court has observed as under: Basically the issue is whether the petitioner had purchased the inputs which were duty paid. It may be true that the petitioner manufactured the finished goods and exported the same. However, that by itself would not be sufficient to entitle the petitioner to the rebate claim. In the present case, when the authorities found inputs utilized by the petitioner for manufacturing export products were not duty paid, the entire basis for seeking rebate would fall. In this case, particularly when it was found that several suppliers who claimed to have supplied the goods to the petitioner were either fake, bogus or nonexistent, the petitioner cannot be claimed rebate merely on the strength of exports made. In the present case also, there are concurrent findings of fact given by all the authorities below with respect to the fake transactions between the petitioner and M/s. Raju Synthetics Pvt. Ltd., we are of the opinion that all the authorities have examined the case in detail and as such no interference is called for. The conclusions arrived at by the authorities below are on the basis of evidence on record and such conclusions are not pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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