Custom, Excise & Service Tax Tribunal
Arising Out Of The Order-In-Appeal ... vs C.C.E & S.Tax, Surat I on 15 November, 2017
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, 2nd Floor, Bahumali Bhavan, Asarwa, Ahmedabad Central Excise Appeal No.77 of 2012 and 11544 of 2013-SM Arising out of the Order-in-Appeal No.RKA/326-327/SRT-I/2011 dated 28.10.2011 and No.CCEA-SRT-I/SSP 464/2012-13/U/S 35A(3) (Final Order) dated 30.3.2013 passed by the Commissioner (Appeals), Central Excise & Customs, Surat I. Ambica Syntex P. Ltd. .. Appellants Vs. C.C.E & S.Tax, Surat I ..Respondent-Revenue
Appearance:
Present Shri Mukund Chauhan, C.A. for the appellants Present Shri N. Satwani, A.R. for the Respondent-Revenue Coram: Honble Dr. D.M. Misra, Member (Judicial) Date of hearing: 2.8.2017 Date of pronouncement: 15.11.2017 Final Order No.13445-13446/2017 Per Dr. D.M. Misra:
These two Appeals are filed against the respective Orders-in-Appeal passed by the ld. Commissioner (Appeals), Central Excise & Customs, Surat I.
2. The Appeal No.E/77/2012-SM relates to recovery of CENVAT credit of Rs.12,31,622/- for incorrect availment of CENVAT credit on the invoices issued by the non-existent dealers, whereas the other Appeal i.e. E/11544/2013-SM relates to refund of Rs.5,53,624/-, which was appropriated against the aforesaid confirmed demand of Rs.12,31,622/-.
3. Ld. Chartered Accountant Shri Mukund Chauhan for the Appellants submits that the Appellant was issued with the show cause notice on 15.1.2008 alleging wrong availment of CENVAT credit of Rs.12,31,622/- on the invoices issued by M/s Dhanlaxmi Textile, M/s Tirupati Industries and M/s Sai Industries, who are non-existent dealers, accordingly, the invoices issued by them were not valid documents, hence, proposed to recover with interest and penalty. The said demand was confirmed by the adjudicating authority with interest and penalty. Aggrieved by the said order, the Appellant preferred Appeals before the ld. Commissioner (Appeals), who in turn, rejected their Appeals. Hence, they approached this Tribunal. This Tribunal vide its Order dated 4.12.2009 remanded the matter to the adjudicating authority to examine the evidences in the form of affidavit filed by the Appellant establishing the existence of the aforesaid three suppliers/dealers of grey fabrics. Consequently, the matter was re-adjudicated by the adjudicating authority. However, he has confirmed the demand with interest and penalty. They filed Appeals before the ld. Commissioner (Appeals), who also rejected their Appeals. Hence, the present Appeals.
4. The ld. C.A. submits that the issue is squarely covered by the judgment of the Honble Gujarat High Court in the case of Prayag Raj Dyeing and Printing Mills Pvt. Ltd. vs. UOI 2013 (290) ELT 61 (Guj.). It is his contention that the present show cause notice was issued to them on 15.1.2008 for recovery of the credit availed during the period 2003-04 invoking extended period of limitation, therefore, barred by limitation. He submits that they have availed credit on the basis of invoices issued by the said three dealers bona fidely, hence, there was no involvement in the fraudulent issuance of invoices. It is his contention that therefore, the credit cannot be denied to them. Further, he has submitted that this Tribunal has consistently followed the judgment of the Honble Gujarat High Court in Prayag Raj Dyeing & Printing Mills Pvt. Ltd.s case (supra). He further submits that applying the principles laid down in the aforesaid case, the impugned order deserves to be set aside.
5. Per contra, the ld. A.R. for the Revenue has submitted that the principles laid down in Prayag Raj Dying & Printing Mills Pvt. Ltd.s case in relation to demand raised for extended period, is not applicable to the facts and circumstances of the present case, inasmuch as the Appellant could not establish by adducing sufficient evidences even though claimed the existence of the three dealers on which, this Tribunal has remanded the matter to the adjudicating authority to examine the evidences in the form affidavit, letters filed by them. It is his contention that the evidences placed by the Appellant before the authorities below have been minutely analysed and the ld. Commissioner (Appeals) has come to a categorical finding that the Appellant could not establish the case of existence of the dealers as claimed before this Tribunal in the earlier round of litigation.
6. Heard both sides and perused the records. The short issue to be answered in the present case is: whether the principles laid down by the Honble Gujarat High Court in Prayag Raj Dying & Printing Mills Pvt. Ltd.s case is applicable and the demands raised for extended period of limitation is bad in law. No doubt, in principle on the eligibility of credit of duty paid on invoices issued by non-existent dealers, the Honble Gujarat High Court decided the issue in favour of the Revenue observing that the Assessee is required to take due care in availing CENVAT credit on the invoices received by him, however, held that the extended period of limitation cannot be applied in the absence of the fact that receiver of the invoice, is a party to the fraud. In the present case, from the beginning, the Appellant had claimed that the three dealers namely, M/s Dhanlaxmi Textile, M/s Tirupati Industries and M/s Sai Industries have been in existence and they have rightly availed the CENVAT credit consciously being fully aware of their existence. On the basis of the said averment before this Tribunal, for verification of the facts, this Tribunal remanded the matter to the adjudicating authority to scrutinise the evidences produced, including the affidavits and other evidence between the owners of shop provided on rent to the dealers. The Appellant had placed certain evidences which are found to be unreliable after its analysis by the adjudicating authority as well as by the ld. Commissioner (Appeals). The conclusion has been drawn that the Appellant had failed to establish that these dealers who had issued invoices to them, based on which the Appellant had availed CENVAT credit were not in existence. These facts were well within the knowledge of the Appellant, since they failed to establish their claim existence of these dealers made before this Tribunal in the first round of litigation, for verification of which the matter was remanded.
7. Ld. Commissioner (Appeals) after analyzing the copy of the letter dated 31.3.2005 addressed by M/s Dhanlaxmi Textile, M/s Tirupati Industries and M/s Sai Industries to Assistant Commissioner, Central Excise concluded that the Appellants were aware of the non-existence of these dealers, at the addresses mentioned in the letter head/ invoices since the genuineness of the said rent deeds produced by the Appellant, could not be established even though the notices dated 18.8.2011 and 26.8.2011 were issued to the owners, to establish the genuineness of the rent deeds. Thereafter, the ld. Commissioner (Appeals) observed that these units are non-existent units and created for issuing fake invoices besides. He has also observed that these letters purportedly to have written by these three units and the rent deeds produced to establish their existence, are unreliable as signatures appended in both the documents are different. Also, taking note of the fact that the Appellants have categorically stated that they would submit the copies of bank statements to establish that the payments were made to the said three units by account payee cheques and sought time of 15 days but did not submit the same. Finally, after analyzing the evidences, the ld.Commissioner (Appeals) concluded as follows:
11. With the material on record , I have no doubt left that the invoices in question are fraudulent and that the Appellant had full knowledge that duty reflected in these invoices were never paid. From the material on record, I observe that the Appellant has been misrepresenting facts before this authority and also the Honble Tribunal.The appellant has not produced any affidavit of any of the writers of the invoices.The appellant only produced letters purportedly written in three business names.Affidavit of one Sh.Hussain, the owner of the premises 26 Patel Colony is produced which is found manipulated and proved false by subsequent Panchnama dated 1.4.2008 drawn at the same premises 26 Patel Colony.
8. The Appellant could not produce any cogent evidence to rebut the said findings of the ld. Commissioner (Appeals) before this Tribunal but reiterated the same submissions advanced before the ld. Commissioner (Appeals). In the result, the Appeal bearing No.E/77/2012-SM challenging the Order No. RKA/326-327/SRT-I/2011 dated 28.10.2011 passed by the ld.Commissioner (Appeals),Central Excise & Customs, Surat - I is dismissed. Since the demand notice has been confirmed, therefore, the other Appeal No.E/11544/2013-SM seeking refund amount of Rs.5,53,624/- during the course of proceeding for recovery of the credit of Rs.12,31,622/- is also liable to be dismissed. Both the Appeals are dismissed.
(Pronounced in the open Court on 15.11.2017) (Dr. D.M. Misra) Member (Judicial scd/ E/77/2012, E/11544/2013-SM 7