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TMI Blog2015 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... tures, dealers or the C&F agent. The purchases are bogus, invoices and other documents are fake and fictitious. The case was started based upon an intelligence collected by Central Excise Intelligence and search at the corporate office of the appellants in Mumbai was carried out from where certain incriminating documents and 6 Nos. of computers/Hard disc were seized. Examination of documents revealed wrong and fraudulent availment of Cenvat credit and utilisation thereof by the appellants. During search operations at Goa unit, appellant received a courier containing the purported invoices of Surya Sponge Iron Ltd., even though no such goods were received from them. Investigations were further carried out from the purported suppliers of the sponge iron. These purported suppliers denied having issued any of those invoices or supplied any goods to the appellants. Reference was made to the jurisdictional Assistant Commissioner relating to Surya Sponge Iron Ltd., who after verifying, informed that the invoices recovered from them are not issued by Surya Sponge Iron Ltd. and no duty as indicated in these invoices have been paid by the said company and no sponge iron was sold to the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit. He also stated that fictitious transactions were maintained in their Mumbai office under the directions of Shri Darshan Churiwala and Shri Vinod Goel. The said statement of Shri Agarwal was retracted on 14/12/2007. Another summon was issued to Shri Agarwal to appear on 10/01/2008. He did not appear for recording of the statement. However, he sent a letter confirming/reiterating the correctness of his statement dated 14/12/2007. 3.2 The concerned persons of supplying firms, namely, (i) M/s.Suryaa Songe Iron Ltd., Jaipur, Orissa, (ii) M/s.Ispat Industries Ltd., Raigad, Maharashtra, (iii) M/s.Ispat Godawari Ltd., Raipur, Chattisgarh (iv) M/s.Nisha Enterprises, Vithal Wadi, Mumbai and (v) M/s.C.J.Enterprises Pvt. Ltd., confirmed that they had not supplied the sponge iron and the invoices were also not supplied. Summonses dated 03/10/2007, 25/10/2007, 07/11/2007 and 14/03/2008 were issued to the Directors of the appellants firm, Shri Darshan Churiwala and Shri Vinod Goel. They did not appear on some or other grounds. They further authorised Shri Naval Kishore Vasu, the General Manager to appear on their behalf. In the meantime, the two directors applied for anticipatory bail. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Additional Commissioner (AR) took us through the show-cause notice and the impugned order and submitted that the present case is a case of absolute fraud wherein the appellants created fictitious invoices and took Cenvat credit on the basis of such invoices. No sponge iron as indicated in the invoice was ever received by them. No duty as indicated in these invoices was paid to the Government and, therefore, there is no question of taking the credit. It was further submitted that they have also manipulated their own records, so as to give an impression that the documents/procedures are genuine and in their own records they even showed as if they have paid for the said goods. However, enquires with the concerned HDFC bank (wherein the appellant has an account and purported payments were made to the purported suppliers of sponge iron) revealed that no payments have been made to the said suppliers. Payments shown against a particular cheque was purported to be paid to Ispat Industries but in reality amount was withdrawn as self in cash. Thus, even in their own ledgers bogus entries were made for payment by the appellants. 5.1 The learned AR further submitted that during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difficulty in producing the proof of payment through the banking channel. The very fact that the appellants have not produced any such documents prove that all the transactions are fictitious and bogus. 6. We have considered the rival submissions. 6.1 The main contention of the learned Counsel for the appellant is denial of cross examination of six persons, whose statements have been relied upon in the show-cause notice. In our considered view this contention cannot be examined in isolation but is required to be examined with reference to the scheme of Cenvat credit. This Tribunal in the case of Bhagwati Steelcast Ltd., Vs. CCE, Nashik reported in 2013 (293) ELT 417 has analysed the scope and purpose of certain rules relating to Cenvat credit. Paragraphs No.73.3 and 73.4 from the said judgement is reproduced below: 73.3 The Cenvat Credit Rules, 2004,? deal with the procedure relating to availment of credit. As per Rule 3, a manufacturer or a producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as Cenvat credit) of the duties specified therein paid on any inputs or capital goods and received by the manufacturer for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the inputs or capital goods were supplied from the stock on which duty was paid by the producer of such goods and only an amount of such duty on pro rata basis has been indicated in the invoices issued by him. It is further stipulated that the burden of proof regarding admissibility to Cenvat credit shall lie upon the manufacturer taking such credit. Sub-rule (2) of Rule 7 of the Cenvat Credit Rules, 2001/2002 (as they stood at the relevant time) further stipulated that a manufacturer/producer taking Cenvat credit on inputs or capital goods shall take all reasonable steps to ensure that the inputs or capital goods in respect of which he has taken Cenvat credit are goods on which appropriate duty of excise as indicated in the document accompanying the goods has been paid and the manufacturer shall be deemed to have taken reasonable steps if he satisfies himself about the identity, name and address of the manufacturer/supplier issuing the document specified in the said Rule either from his personal knowledge or on the strength of a certificate given by a person with whose handwriting or signature he is familiar with or on the strength of a certificate issued to the manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacturer assesses. Sub-rule (5) of Rule 7 very specifically states that the burden of proof related to the admissibility of Cenvat credit shall lie on the manufacturer taking such credit. Thus, in the present case also it is the appellants whose responsibility is to produce proof regarding the admissibility of the Cenvat credit. 6.3 As elaborated by this Tribunal in paragraphs 73.3 and 73.4 in the case of Bhagwati Steelcast Ltd., (supra) that the Cenvat credit can be taken only after the receipt of the inputs in the factory. Secondly, such received goods should be covered by a duty paying invoice. In essence, the goods should be received and the goods should be duty paid and there should be evidence for the same. 6.4 In the present case, the allegation of the Revenue is that the appellant has not received the goods. The invoices are fictitious/bogus and no duty has been paid on such fictitious transactions. In support of these allegations, Revenue has produced evidence from the bank of the appellant that no money has been paid to the purported five suppliers of sponge iron. The least that is expected from the appellant was to produce evidence from the banking channels t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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