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TMI Blog2022 (2) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared the goods but had generated invoices only for the purpose of passing CENVAT credit - It is also difficult to accept the finding of the Commissioner (Appeals) that the respondent was not a party to the fake transactions. It is only the respondent who was to gain by adoption of such a mode and, therefore, the conclusion that even though only invoices were received by the respondent without the goods, the respondent had no role to play is perverse. The two decisions in GIAN CASTINGS PVT. LTD. VERSUS COMMISSIONER OF C. EX., CHANDIGARH [ 2015 (11) TMI 1096 - CESTAT NEW DELHI] and DUTT MULTIMETALS PVT. LTD. VERSUS C.C.E., CHANDIGARH-I [ 2016 (11) TMI 1329 - CESTAT CHANDIGARH] rendered by learned single members do not help the respondent. In these cases there was no evidence, whereas in the present case there is enough evidence on the record to establish that fake invoices were issued only to benefit the respondent. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 50174 OF 2019 - FINAL ORDER NO. 50135/2022 - Dated:- 15-2-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Om Prakash Bisht, Authorized Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 4. A reply was filed to the aforesaid show cause notice by the respondent, denying the allegations contained in the show cause notice. 5. The Additional Commissioner, by order dated 23.08.2017 disallowed the credit availed by the respondent for the reason that the declared registered factory premises of the so called manufactures were non-existent and these manufacturers were either not working or working on papers only. The relevant portion of the order on this aspect is reproduced below: 59. I find that investigation in the matter was carried out by the Officers of DGCEI and it was found that the premises of M/s Aditya Enterprises, Plot No. IV, Bokaro Industrial Area, Balidih, Bokaro (Jharkhand) was not in existence. Further, in the premises of M/s Shree Ram Engineering Casting , Near Red Rose School, Mango, Jamshedpur also it was found that there was nothing like a manufacturing unit and the said premises were being used for the activity of construction of a residential apartment. Similarly location of M/s Ganesh Udyog at Baramandi, Near Asvati Hospital, B.P. Polythechnic, Dhanbad; locations of M/s L.S. Construction at near Kali Mandir Road, Godown, Ghar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, and according to the settled law, such document is at the best voidable one and is valid till it is set aside. The transaction that takes place on the basis of such document is a good and valid transaction and can even give a good title to the holder in due course for the valuable consideration without notice. xxxxxxxxxx 5.3. I find that the appellant contended that the subject invoices were issued fraudulently but were not fake. I agree with the said contention of the appellant I find that there is a marked difference between a forged documents and documents issued by fraud, a forged or a bogus documents is one which is concocted and created and it is in fact a non existent document and it has no value in the eyes of law as it does not lawfully exist at all. On the other hand, a document issued in the context of a fraud or mis representation, and according to the settled law such document is at best voidable one and is valid till it is set aside. I find that the transaction that takes place on the basis of such document is a good and valid transaction and can even give a good title to the holder in due course for the valuable consideration without notice. xxxxxxxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices in the factory of manufacturer. Further, rule 4(5) of the Credit Rules casts a burden of proof regarding the admissibility of the CENVAT credit upon the manufacturer taking such credit. Since the respondent failed to comply with the above provisions of the Credit Rules, it was not entitled to take CENVAT credit amounting to Rs. of ₹ 86,38,805/- on the strength of invoice which were not genuine; (iii) The respondent had connived with the concerned person of various manufacturing firms namely M/s Aditya Enterprises, M/s Shree Ram Engineering Casting, M/s M. K. Engineering Works and M/s Ganesh Udyog, who were either working on paper only or were involved in issuing bills, without production and clearance of goods; and (iv) The respondent in connivance with the manufacturers and dealers had devised a novel modus operandi for availing undue CENVAT credit. 9. Shri Vijay Kumar learned counsel appearing for the respondent however supported the impugned order passed by the Commissioner (Appeals) and in support of this contention placed reliance upon the following decisions: (i) Gian Castings Pvt. Ltd. vs. Commissioner of C. Ex., Chandigarh [2015 (319) E.L.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Shree Ram Engineering Casting, it was found that there was nothing like manufacturing unit and the said premises were being used for the activity of construction of a residential apartment; (ii) M/s Shree Ram Engineering Casting had not filed any return for the relevant period and moreover it also transport from the investigation that M/s Bajrang Steel Traders had purchased fake bills from the above parties; and (iii) Shri Nitish Pandey partner of M/s Shree Ram Engineering Casting in his statement dated 27.04.2015 stated that he had not purchased any excisable goods and only sold the bills using the name of companies/firms to pass on CENVAT to various companies, including M/s Tirupathi associates. (3) M.K. Engineering Works (i) That all the MS Scrap purchased by the Respondent from M/s M.K. Engineering Works, Jamshedpur was received under their excisable invoices. However, ER-1 returns of M.K. Engineering Works for the month of July 2011 to March 2013 forwarded by Assistant Commissioner, by letter dated 03.03.2016 revealed that they had produced 23.847 MT of scrap involving ₹ 40,713/- of duty, whereas the Respondent had shown purchase of 1620.650 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l these activities were carried out by Nitish Pandey and he only signed the papers and used to receive ₹ 10,000/- p.m.; (v) Shri Jeetu Agarwal proprietor in Tirupati Associates in his statement dated 30.07.2014 stated that Shri Sumit Khandelwal, Proprietor of M/s Balaji steels handed over the bills and bilties of supplier s companies and got issued the bills in the name of buyer. Further, the goods shown to have purchased and sold were ever received in his premises. 13. Shree Prem Chand Jain, Director in his statement dated 02.02.2016 stated that he had no information as to from where the suppliers purchased the goods. Since the bills and bilties were received later, he did not know whether the said goods were manufactured/produced in their factories and central excise duty payment thereon had been made or not. When pointed out that the goods were received without invoice and bills/bilties had been arranged later, the CENVAT credit in respect of those invoices/bills were inadmissible, he accepted the fact and reversed the CENVAT Credit amounting to ₹ 55,24,141/-vide entry number 1 dated 02.02.2016. 14. Investigation carried out with the Transporters also rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of residential apartments; and M/s Ganesh Udyog and M/s L.S. Construction were not found on the mentioned address. It is clearly established that neither these firms were engaged in the manufacture of goods nor they had sold or cleared the goods but had generated invoices only for the purpose of passing CENVAT credit. It is also difficult to accept the finding of the Commissioner (Appeals) that the respondent was not a party to the fake transactions. It is only the respondent who was to gain by adoption of such a mode and, therefore, the conclusion that even though only invoices were received by the respondent without the goods, the respondent had no role to play is perverse. The respondent may have received the raw materials for manufacturing purposes, but there is nothing to link the said purchase of the raw material with the invoices against which CENVAT credit was taken by the respondent. It was imperative for the respondent to establish the purchase of such raw materials with the invoices issued by the aforesaid firms. 21. The two decisions in Gian Castings and Dutt Multimetals rendered by learned single members do not help the respondent. In these cases there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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