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TMI Blog2021 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... cellaneous Application filed by the petitioner. Be it stated that in the appeal filed by the petitioner before CESTAT being appeal No. E/85319/2018, CESTAT vide order dated 27.09.2018 had held that petitioner had made mis-statement and thus practised fraud; therefore the appeal filed by the petitioner was dismissed. It was for recalling of finding of mis-statement or of fraud by CESTAT in the order dated 27.09.2018 that miscellaneous application was so filed by the petitioner which was not only dismissed by CESTAT vide the impugned order dated 28.08.2019 but it also imposed cost of Rs. 10,000.00 on the petitioner. 4. Case of the petitioner as pleaded is that it is a company incorporated under the Companies Act, 1956 engaged in the business of manufacturing multi-layered plastic flexible laminated collapsible tubes and multi-layered plastic flexible laminated web classifiable under Chapter 39 of the First Schedule to the Central Excise Tariff Act, 1985. In the course of excise audit of the petitioner's record carried out during February, 2013 for the period from October, 2010 to September, 2012, the auditors took the view that petitioner had availed ineligible credit of service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ried the matter in further appeal before the CESTAT to the extent the appellate order was adverse to the petitioner. It is stated that in the course of the hearing before the CESTAT, counsel for the petitioner submitted two sample invoice copies on the basis of which petitioner had availed CENVAT credit on labour services. Authorized representative of the department raised objection as to the two invoices by contending that those were produced as evidence without permission of CESTAT further pointing out that the words 'labour charges' were inserted in the invoices subsequently. Therefore, an allegation was made that petitioner had practised fraud in converting transportation bill to labour charge bill. This contention of the authorized representative was accepted by CESTAT and vide the order dated 27.09.2018, the appeal was dismissed by holding that filing of the two invoices should be considered as mis-statement or fraud practised by the petitioner and therefore petitioner was not entitled to any relief. 9. Petitioner filed miscellaneous application for expunging the findings of CESTAT on fraud. The miscellaneous application was heard by CESTAT whereafter by the impugned order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal had played fraud and the rejection of the rectification application on this point. 6. Issue notice, returnable within six weeks." 12. Mr. Eishvaryesh Bhardwaj, Deputy Commissioner, Division-VI, Central Goods and Services Tax (CGST) and Central Excise, Thane Rural has filed affidavit on behalf of the respondents. After commenting on the merit of the claim of the petitioner it is stated that against the order of CESTAT dated 27.09.2018 whereby the appeal of the petitioner was dismissed, petitioner had filed an appeal before this Court which was registered as Central Excise Appeal (L) No.114 of 2019. However, petitioner withdrew the said appeal on 15.01.2020 on the ground that petitioner had sought settlement under the scheme. 12.1. It is stated that petitioner had filed declaration under the above scheme on 31.12.2019, which was accepted by the designated committee whereafter the discharge certificate was issued to the petitioner on 17.02.2020 for full and final settlement of the tax dues. 12.2. Respondents have contended that petitioner had filed appeal before this Court on 15.10.2019 after passing of the impugned order dated 28.08.2019. When the appeal was withdrawn, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e finding of fraud recorded by the CESTAT against the petitioner may be deleted and / or expunged by this Court. 14. Mr. Bangur, learned counsel for the respondents on the other hand submits that the writ petition filed by the petitioner is totally redundant as the entire matter pertaining to tax liability of the petitioner has been settled under the scheme. As a requirement under the aforesaid scheme, petitioner had withdrawn the appeal filed by it before this Court against the order of CESTAT dated 27.09.2018. After withdrawal of the appeal whereby the order dated 27.09.2018 had attained finality and after settlement of the tax dues, it is not open to the petitioner to again assail the final findings of CESTAT collaterally by alleging that finding of fraud is not justified. The writ petition is nothing but an academic exercise and, therefore, should be dismissed. He also submits that nothing is on record to show as to whether petitioner has deposited the cost of Rs. 10,000.00 as imposed by the CESTAT vide the impugned order. 15. Submissions made by learned counsel for the parties have received the due consideration of the Court. 16. Before adverting to the relevant facts, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich may extend to three times the amount involved in the fraud. As per the first proviso, where the fraud in question involves public interest, the term of imprisonment shall not be less than three years. As per explanation (i), fraud in relation to affairs of a company or any body corporate includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner with intent to deceive, to gain undue advantage from, or to injure the interests of the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss. 18. From a reading of the above meaning and definition of fraud, it is quite evident that fraud has serious civil as well as criminal consequences. To constitute the offence of fraud there must be intent to deceive. That apart, a finding of fraud is a stigma which is a reflection on the integrity of a person or of a corporate entity. 19. In Bhaurao Dagdu Paralkar Vs. State of Maharashtra, (2005) 7 SCC 605, Supreme Court dealt with the expression 'fraud' and its impact. It was held as under:- "9. By "fraud" is meant an intention to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t obtained by playing fraud is a nullity and such an order, decree or benefit can be challenged at any time in any proceeding. 21. However, in Harjas Rai Makhija Vs. Pushparani Jain, (2017) 2 SCC 797, Supreme Court highlighted that there must be a specific allegation of fraud. When there is an allegation of fraud, it must be enquired into. It is only after evidence is led coupled with intent to deceive that a conclusion of fraud could be arrived at. A mere concealment or non-disclosure without intent to deceive or a bald allegation of fraud without proof and intent to deceive would not render a decree obtained by a party as fraudulent. To conclude in a blanket manner that in every case where relevant facts are not disclosed, the decree obtained would be fraudulent would be stretching the principle to a vanishing point. Referring to the decision of the Supreme Court in Bhaurao Dagdu Paralkar (supra) and other cases, Supreme Court held that it is clear that fraud has a definite meaning in law. It must be proved and not merely alleged and inferred. 22. Takeaway from the above decision is that to constitute fraud there must be an intent to deceive. When an allegation of fraud is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ik Milacron India Ltd. Vs. Commissioner of Central Excise Ahmedabad-I (2011) (21) S.T.R.-8 (Guj.). So they have contended that when the service has been received to meet statutory requirement it is covered under the definition of input service and credit of Service Tax paid on the same is available. 14:2:a: Here also I find that this service is essential for manufacturing. Without these railings and safety of workers the manufacturing process cannot be undertaken. Therefore, these services are in or in relation to manufacturing and therefore Cenvat Credit of Rs. 968/- in respect of Service Tax paid on these services is allowable to the assessee. 14:3: Regarding Site clearance service they have stated that the said service had been utilized to remove the mezzanine floor in passage. Mezzanine floor is a raised platform that creates a floor like space and can be used for storage of materials. Mezzanine floor in passage had been removed as it got rusted over a period of time and additional storage equipment had been brought in its place. They have thus concluded that this service is used in relation modernization, renovation or repairs of factory. They have further contended that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge bills. Thus, he alleged that fraud was practised by the petitioner. We find that learned Member of CESTAT inspected the sample invoices whereafter he observed that labour charges were inserted in the two bills dated 06.09.2010 and 06.03.2011 by a different handwriting. Taking the view that it should be considered as misstatement or fraud, CESTAT held that it would amount to fraud within the definition of the Indian Penal Code. Thereafter, the appeal was dismissed by relying on the judgment of the Supreme Court in S. P. Chengalvaraya Naidu Vs. Jagannath, AIR 1994 SC 853 holding that a person whose case is based on a false suit has no right to approach the Court. 27. When the petitioner sought for rectification of the above finding of fraud by filing miscellaneous application, the same was dismissed by the impugned order dated 28.08.2019. In paragraph 5 of the said order, it is stated that respondent had made submission regarding tampering of the invoices and fraud being practised by the petitioner. Counsel for the petitioner was asked by the CESTAT to respond to such allegation but he did not respond. Therefore, relying on section 73 of the Indian Evidence Act, 1872, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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