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TMI Blog2024 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... y scarp whereas the manufacturer s invoices show the description of the goods as prime finished goods . Regarding the taking of Cenvat Credit whether the same is correct or not, he stated that he cannot say anything. The appellant had voluntarily debited the Cenvat Credit availed on the strength of invoices issued by M/s Blue Star Exports on 14.12.2016 i.e. before the date of statement of Sh. Kuldip Singh, partner of the appellant, recorded on 07.09.2017 and he has not retracted his statement till date which clearly shows that he has accepted his lapse - as for Rule 4 of the Cenvat Credit Rules, 2004 read with Rule 9(5) of the Cenvat Credit Rules, 2004, the burden of proof regarding the admissibility of the Cenvat Credit shall lie upon the manufacturer or provider of output service before taking such credit. There is no infirmity in the impugned order passed by the learned Commissioner (Appeals), accordingly the same is upheld by dismissing the appeal of the appellant - appeal dismissed. - Mr. S. S. GARG, MEMBER (JUDICIAL) Present for the Appellant: Sh. Vikrant Kackria, Advocate Present for the Respondent: Sh. Yashpal Singh, Authorized Representative ORDER The present appeal is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al users and the cenvat invoices were issued to the various furnace units at Mandi Gobindgarh without the actual supply of GI wires and MS wires purchases by them . He further stated that furnaces required scrap or waste/cuttings of iron and steel for manufacturing their goods so they changed the description of goods as GI wire cuttings or MS wire cutting along with rate of the goods to show their sale invoices as genuine sale invoices and passed the cenvat credit to these furnaces units. (c) On being asked about the financial transaction he stated that We used to issue cenvatable invoices of the various furnace units of Mandi Gobindgarh without the actual supply of the purchased goods and passed the cenvat credit to them. As we had sold the purchased goods on cash basis to small manufacturers in the market, the cash received on such sales is given back to these furnace units and adjust our finance. Whereas as per normal practice, the furnace units used to purchase non-excisable scrap from the kabaris from the open market and adjust the non-excisable scrap with the quantity shown on cenvatable invoices . He further admitted that the statement of Sh. Kesar Singh was correct and base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of M/s. Unipearl Alloys, Mandi Gobindgarh has been recorded on 07.09.2017 and he stated that: We purchased ERW pipes cutting which is scrap from M/s. Blue star Exports, Ludhiana (a central excise registered dealer); I have seen the chart prepared on the basis of our purchases made from Ms/ .Blue Star Exports, Gill Chowk Ludhiana. After matching with our records, I admit that this chart is correctly prepared on the basis of our purchase invoices from M/s. Blue Star Exports, Ludhiana; we have no manufacture invoices available with us; Yes, I admit that we have taken the cenvat credit on cuttings which is basically scrap whereas the manufacturer s invoices show the description of goods as prime finished goods. So regarding taking of cenvat credit is correct or not I cannot say anything; I have gone through both the statements dated 01.03.2016 and 17.08.2016 of Sh. Varinder of Mandi Gobindgarh. These are the facts on record, so, I cannot say anything ; I admit that we have availed the cenvat credit of Rs. 8,52,292/-- on the strength of these invoices issued by M/s. Blue Star Exports, Ludhiana. I have debited Rs. 8,50,292/- vide RG-23 Part-II entry No. 447 dated 14.12.2016 and submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Star Exports, Ludhiana and these goods were actually delivered to the said firm since if the goods are not sent to M/s Blue Star Exports, Ludhiana, who actually purchased the same from these manufacturing units of Mandi Gobindgarh. This aspect remains unanswered in the show cause notice. 4.4 He further submits that the appellant purchased the impugned goods from M/s Blue Star Exports, Ludhiana under a valid cover of invoices which was legitimately issued by the said dealer. There is no doubt regarding the legality of invoices issued by the dealer. Therefore, it is wrong to allege that the appellant contravened the provisions of Central Excise Rules in order to avail irregular Cenvat Credit. 4.5 He further submits that the partner of the appellant had clearly stated that they had received the goods. Even otherwise the allegation of the department that the goods have not entered in the state of Punjab, is irrelevant because the authorities below have not at all considered the fact that none of the goods supplied by the M/s Blue Star Exports to the appellant had originated from state other than Punjab. All the goods which have been supplied to the appellant by M/s Blue Star Exports h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that the Commissioner (Appeals) in para 6.2 has observed as under: Para 6.2 It has been categorically confessed by him (Varinder Kumar) that he himself was involved in fraudulent activities, the fact of which has been put in the SCN in para 5. Thus, it is clear that Sh. Varinder Kumar was the mastermind behind all the fraudulent transactions. The statements of Sh. Varinder Kumar dated 01.03.2016 and 17.08.2016 and Sh. Kesar Singh dated 28.07.2015 was shown to the partner of M/s. Unipearl Alloys but he refused to comment on it. As per para 1.15 of Order-in-Original he admitted the fact of availment of cenvat credit on the basis of fake invoices issued by M/s. Blue Star Exports, Ludhiana. In view of the confession by the partner of the firm, it is clear that they had availed credit on the basis of fake invoices without actual receipt of goods and after admitting he fact they also debited duty of Rs. 8,50,000/-. 5.2 The learned AR further submits that as per the statement of Sh. Varinder Kumar of M/s Blue Star Exports dated 17.08.2016, they purchased prime material and sell the same to local market in cash and pass the Cenvat Credit of same to manufacturers by changing the descr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.01.2016 and 01.03.2016, against these excisable/cenvatable purchases of both locally purchased purchases made from other states we issued cenvatable sale invoices by changing the description of goods to cutting/ Def (defective) waste/scrap to the various furnace units of Mandi Gobindgarh without the actual supply of the purchased goods. As these units require scrap as raw material for the manufacture of their excisable goods which they procure from local market as Kabari scrap without bills to adjust their purchase we issued cenvatable sale invoices and passed the cenvat credit to them. As we had sold the purchased goods there only to small manufacturers on cash basis in the market, the cash received on such sales was given back to these furnace units and adjusted our finances. Same practice was applied to the goods which entered Punjab and had mention in the ICC barrier data of Punjab Excise Taxation department. As these goods of first quality these were sold in the local market on cash basis. Their description was changed on the cenvat invoices as MS bar Defective(def) /cutting/TMT cutting etc showed the low rates on these dale invoices to make it look as genuine prices of scra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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