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TMI Blog2017 (12) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. The expression is also used when any inputs on which credit is taken is cleared as such (without use in further manufacturing) by covering the inputs so cleared by invoice on which duty reversal is shown. These situations are inherently different from the situation where credit is taken fraudulently and then used for issuing invoices showing utilization of cenvat credit because the person issuing the invoices enables the person receiving the invoice to take credit of duty so shown as paid. The Cenvat credit rules provide for availing cenvat credit on inputs subject to the condition that an invoice is issued with all necessary details of the goods and duty paid in favour of the recipient. It is further a necessary condition that the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of PVC compound from one M/s. Aggarwal Plastic (India) and were availing the benefit of modvat credit paid thereon. However, it came to light that M/s. Aggarwal Plastic stopped their manufacturing activities since January 2002, and were issuing fake invoices of PVC compound and were passing on non admissible credit to M/s. Satvik Industries. As a result, on further investigation, the statements of various persons were recorded. The department found that the machines installed in the factory premises of M/s. Satvik Industries and the number of employees were insufficient to manufacture the PVC insulated wire and winding wire of copper that is their final product. Accordingly, the lower authorities held that the said appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier impugned order dated 26.03.2007 (which is applicable against M/s. Asha Chemicals) duty amounting to ₹ 9,61,504/- and 4,53,529/- stands confirmed against M/s. Asha Chemicals along with applicable penalties. 5. With the above background, we have heard Shri Abhas Mishra representing M/s. Satvik Industries and M/s. Asha Chemicals. None present for M/s. Genius Electrical. Shri R.K. Mishra, Ld. DR appeared for Revenue. 6. Ld. Advocate appearing for the appellant submits that even if the allegations and findings of the Revenue are accepted to be correct, the illegal credit so availed by them stands debited for payment of duty on the final products. As such, he submits that inasmuch as the credit denied to them already stands reversed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old "sales invoices" without supplying the raw materials. Such invoices stand issued to M/s. Satvik Industries, who was a manufacturer of PVC insulated wire. Such invoices have also been issued to M/s. Asha Chemicals a registered dealer who in turn passed on such credit after retaining their commission to the tune of ₹ 20-25 Paise per KG of weight of the goods mentioned in the dealers invoice. 9. The statement of Shri Rajeev Aggarwal has been corroborated by the statements given by Shri Rajesh Jain of M/s. Satvik Industries. Shri Jain admitted receipt of invoices from M/s. Aggarwal Plastics as well as M/s. Asha Chemicals without receipt of the accompanying raw material. He further admitted that M/s. Satvik Industries had also issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced on behalf of the appellant. 14. The expression "reversal of credit" is normally used when wrong credit is reversed by debit in the cenvat credit account without issue of any invoice. The expression is also used when any inputs on which credit is taken is cleared as such (without use in further manufacturing) by covering the inputs so cleared by invoice on which duty reversal is shown. These situations are inherently different from the situation where credit is taken fraudulently and then used for issuing invoices showing utilization of cenvat credit because the person issuing the invoices enables the person receiving the invoice to take credit of duty so shown as paid. Here the fraudulent credit is passed on to the person receiving th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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