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TMI Blog2017 (12) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in its dealings with the first stage dealer, and the credit was allowed - following the same, credit allowed - appeal allowed - decided in favor of Revenue. - Appeal No. E/1936 & 1937/2010-EX [ SM ] - Final Order Nos. 71899-71900/2017 - Dated:- 30-6-2017 - Mr. Anil Choudhary, Member ( Judicial ) Shri Sandeep Kumar Sing, Deputy Commissioner ( AR ) for Appellant None for Respondents ORDER Per : Anil Choudhary These two appeals are arising out of Order-in-Appeal No. 255-257-CE/APPL/KNP/2010 dated 22/04/2010 passed by Commissioner of Central Excise Customs (Appeals), Kanpur, confirming the disallowance of Cenvat credit amounting to ₹ 10,93,074/- to M/s Ram Shiv Industries Ltd., Kanpur under Rule 12 of Cenvat Credit Rules, 2002 and Rule 14 of Cevnat Credit Rules, 2004 read with Section 11A and Proviso to Sub-section (1) of Section 11A of the Central Excise Act, 1944 along with interest under Section 11AB of the Central Excise Act, 1944. Further penalty of ₹ 10,93,074/- to M/s Ram Shiv Industries Ltd., Kanpur, under Section 11AC of the Central Excise Act, 1944 read with Rule 13 (2) 15(2) of the Cenvat Credit Rules, 2002/2004, further penalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the party and two related persons. The said show cause notice was decided through the Order in Original dated 30.10.2009 whereby he disallowed the Cenvat credit of ₹ 10,93,074/- and Cess availed on said 48 invoices under Rule 12 of Cenvat Credit Rules, 2002 and Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(1) of Central Excise Act, 1944 along with recovery of interest under Section 11-AB of the Act. Further, he also imposed penalty ₹ 10,79,965/- under Rule 13 (2) and 15(2) of Cenvat Credit Rules, 2002/2004 read with Section 11AC of the Act on the party and personal penalty of ₹ 10,00,000/- upon Shri Suraj Prakash, Director of the company and ₹ 10,93,074/- on Shri S.K. Gupta, Proprietor of M.K. Steels both under Rule 26 of Central Excise Rules, 2002. Aggrieved by the said order, respondents filed appeals before the Commissioner (Appeals) on the ground that M/s RSIL had availed credit on inputs purchased from M/s M.K. Steels and others through above referred 48 invoices was legal and proper and they had taken all precautions as laid down under the Rules. They further submitted that they had availed Cenvat credit on the strength of invoices issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The facts in the case of Juhi Alloys Ltd., were that the assessee was engaged in manufacture of MS Bars, Rounds, SS Flats other products and were registered dealer and had procured raw material from M/s M. K. Steels Pvt. Ltd., Kolkata. The goods covered by the invoices raised by M/s M. K. Steels Pvt. Ltd., Kolkata where received by the assessee and were entered in the Cenvat credit account. Inputs were used for the manufacture of final products, which were cleared against payment of duty. On enquiry by the Assistant Commissioner, Central Excise, Bolpur, it was found that the original manufacture of MS Ingots, namely; M/s Sarala Ispat (P) Ltd., Durgapur, was non-existent. The assessee availed of the Cenvat credit on the strength of invoices, which were issued by M/s M. K. Steels Pvt. Ltd., (Trader-Dealer) which was the first stage dealer. A notice to show cause was issued to the assessee which resulted in an order of adjudication confirming the demand of duty under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(1) of Central Excise Act, 1944. A personal penalty was imposed on the Director of the assessee/company as well as the Authorized Signatory. In appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises of the assessee under the cover of Form 31 issued by the Trade Tax Department and the ledger account as well as the statutory records establish the receipt of the goods. In such a situation, it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee, in the said case, was found to have duly acted with all reasonable diligence in its dealings with the first stage dealer (M/s M. K. Steels Pvt. Ltd.). The Hon ble High Court further observed in Para 8 of Juhi Alloys Ltd., as follows:- 8. In terms of the provisions of Rule 7(4) of Cenvat Credit Rules, 2002 Rule 9(5) of Cenvat Credit Rules, 2004, a manufacturer is required to check the particulars as mentioned in the invoice issued by the first stage dealer and he should be familiar with him. As rightly observed by Commissioner (Appeals), it is not only possible but impractical also for an assessee to further check the records maintained by the first stage dealer and to verify correctness of the same. It is sufficient if the assessee buys the goods from first stage dealer whose status he has checked and verified. There is not dispute in the present case that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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