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TMI Blog2014 (9) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Rules, 2002 (hereinafter referred to as "Rules, 2002"). 2. Facts leading to the present Special Civil Application in nutshell are as under: 2.1 That the petitioner who was exporter cum manufacturer filed rebate claims of Rs. 30,43,944/for the goods i.e. MMF(P) exported by them on payment of central excise duty, exported under different invoices and by submitting the ARE-1s etc. 2.2 While scrutinizing the said rebate claim and on the basis of the documents filed by the petitioner and on verification of duty payment it was found by the department that the petitioner has purchased the exported goods from M/s. Universal Textiles, Surat and the said goods were processed by one M/s. Mamta Silk Mills Pvt. Ltd., Surat. On further inquiry it was found by the Department that the entire transactions were fake and as such they were only billing transactions only with a view to get the CENVAT credit as well as the rebate and therefore, the petitioner was served with the show-cause notice dated 16.03.2006 by which the petitioner was called upon to show cause as to why the rebate claim of Rs. 30,43,944/filed against ARE-1s mentioned in the table should not be rejected under Rule 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice, the petitioner submitted the reply dated 06.04.2007 by submitting that as such the goods have been physically exported out of India and that the petitioner has paid the amount of duty and proper documents for claiming the rebate claims are also filed. It was submitted that therefore the petitioner is entitled to the rebate of duty on the goods actually and physically exported. 2.3 That the Assistant Commissioner of Central Excise and Customs, Surat adjudicated the said show-cause notice and passed the OIO on 22.06.2007 rejecting the rebate claim submitted by the petitioner by observing that there were only paper transactions between M/s. Universal Textiles and M/s. Mamta Silk Mills Pvt. Ltd. and between the petitioner and M/s. Universal Textiles and the same was only billing activities for getting the benefit of CENVAT Credits as well as the rebate. 2.4 That feeling aggrieved and dissatisfied with the Order in Original passed by the Assistant Commissioner, Central Excise, Surat rejecting the rebate claim of Rs. 30,43,944/filed by the petitioner under Rule 18 of the Rules, 2002 in respect of the respective 12 ARE-1s, the petitioner preferred appeal before the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods/processed fabrics from one M/s. Universal Textiles. It is submitted that as such the said M/s. Universal Textiles purchased the unprocessed fabrics from one M/s. Delta Blues and thereafter send the said unprocessed fabrics to one M/s. Mamta Silk Mills Pvt. Ltd. for processing and thereafter the said processed goods/fabrics were returned to M/s. Universal Textiles who in turn sold the processed fabrics to the petitioner. It is submitted that as such M/s. Universal Textiles from whom the petitioner purchased the processed fabrics which came to be exported by the petitioner was at no point of time declared as a fake company. It is submitted that therefore and in such a situation denial of the rebate claim is not justified, which deserves to be quashed and set aside. 3.3 It is further submitted by Shri Dave, learned advocate appearing on behalf of the petitioner that as such subsequently the proceedings were initiated against M/s. Mamta Silk Mills Pvt. Ltd. with respect to the very goods on which M/s. Mamta Silk Mills Pvt. Ltd. claimed the CENVAT Credit and the order came to be passed by the adjudicating authority reversing the CENVAT Credit availed by the said M/s. Mamta Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions between M/s. Delta Blues (Supplier of unprocessed fabrics to M/s. Universal Textiles from whom the petitioner is alleged to have purchased the input / raw materials) and the transactions between M/s. Universal Textiles (Supplier) and the petitioner are found to be fake transactions. It is submitted that therefore in the facts and circumstances of the case, when it has been found that the transactions between M/s. Universal Textiles (Supplier) and the petitioner were sham being mere paper transactions and it was only billing activities, the petitioner is rightly denied the rebate claim. 4.1 It is submitted that so far as the contention on behalf of the petitioner that M/s. Universal Textiles procured the processed textiles under invoices of M/s. Mamta Silk Mills Pvt. Ltd. and the processor and that M/s. Mamta Silk Mills Pvt. Ltd. has paid the duty demanded by the department on account of the wrong credit availed by the said processor on invoices issued by fictitious / unknown persons and therefore, now the duty has been paid by the said M/s. Mamta Silk Mills Pvt. Ltd. the petitioner shall be entitled to rebate claim is concerned, it is submitted that on the aforesaid, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound to be fake transactions and only billing activities for the purpose of availing CENVAT Credit and the rebate. It is submitted that therefore when even the petitioner has failed to satisfy the actual movement of goods from M/s. Universal Textiles to the petitioner and the transactions between M/s. Universal Textiles and the petitioner are found to be fake, the petitioner is rightly denied the rebate claim. It is further submitted that as such in the case of very petitioner with respect to other similar transactions, it was found that the very petitioner had indulged into the similar activities of fake transactions and billing activities for the purpose of getting the benefit of the CENVAT Credit and the rebate claim and the petitioner came to be denied the rebate claim which has been confirmed upto this Court. It is submitted that therefore as such the petitioner is found to have been indulged into similar activities of fake transactions only for the purpose of billing activities and getting the benefit of CENVAT Credit / rebate claim. Making above submissions, it is requested to dismiss the present special civil application. 5. Heard learned advocate appearing on behalf of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. and thereafter from M/s. Mamta Silk Mills Pvt. Ltd. to M/s. Universal Textiles and thereafter from M/s. Universal Textiles to the petitioner. At this stage some findings recorded by the adjudicating authority which reads as under are required to be referred to. "Hence, I find that there is only paper transaction between M/s. Universal Textiles, Mamta Silk Mills Pvt. Ltd. and the claimant there is no any physical movement of goods viz. grey fabrics or processed Man Made Fabrics amongst them. M/s. Mamta Silk Mills Pvt. Ltd., Surat, M/s. Universal Textiles and the Claimant has wrongly & fraudulently availed CENVAT Credit of Rs. 58,07,084.00 by showing receipt of 10,55,288.00 L Mtrs of grey fabrics/finished fabric without physically receiving the said fabrics with an intention to facilitate the Claimant to encash it by way of rebate claims. I also find that the duty paid on finished goods will not serve the purpose for admissibility of rebate because the claimant may have exported the goods, but they have not exported the goods claimed to be cleared under the above ARE1' s and duty paying invoices and may have exported some other goods procured by them from non-duty paying units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be denied. At that stage also the petitioner heavily relied upon the decision of this Court in the case of D.P. Singh (Supra). While not accepting the said submission and while denying the rebate claim even on the actually exported goods, the Division Bench 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. Universal Textiles, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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