Custom, Excise & Service Tax Tribunal
M/S.Sagar International (P) Ltd vs Cce, Delhi-Ii on 3 August, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. BENCH-,,,,,SM Excise Appeal No.1471/08-SM M/s.Sagar International (P) Ltd. Appellant Vs. CCE, Delhi-II Respondent
Present for the Appellant : Ms.Sukriti Das, Advocate Present for the Respondent:Shri.S.K. Panda, J.C.D.R. Coram: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER Date of Hearing/Decision:03.08.2011 ORDER NO. _______________ DATED:________ PER: D.N.PANDA Appellants contention is that when invoices of MS scrap has been received from M/s. Mahavir Prasad and those were used in manufacture, there cannot be denial of Cenvat Credit since the department has no objection to returns filed by the appellant, nor any discrepancy in its excise records were found. It is also submission of the appellant that Department has not found out any contrary evidence to show that the MS scraps were not used in manufacture by the appellant. The history of the case as is stated by the appellant is that when the proceeding of Mahavir Prasad was initiated by Department, this appellant was a co-noticee there and penalty was levied. Subsequently, such a penalty was waived consequent upon remand by Tribunal. Therefore there cannot be any denial of cenvat credit in the present proceeding. There was also no statement recorded about bringing of the scrap from other sources by the appellant. Ld. Counsel also submits that the proceeding was time barred when the material facts were within the knowledge of the Department while dealing the appellant as a co-noticee in the case of M/s. Mahavir Prasad and Co.s case.
2. On the other hand, ld. JCDR invites attention to para 10 of the appellate order to bring out the material facts of the case. He says that the appellant was conduit to cause loss of Revenue using only invoices and claimed cenvat credit in respect of goods mentioned in the fake invoices as if those were cleared by M/s.Mahavir Prasad & Co. Drawing attention to para 10.2 of the order, he brings out the nexus of the appellant with M/s. Mahavir Prasad and Co. was well evident. The modality of issuance of the fake invoices comes out from that para. He also submits that it is unbelievable how the appellant transported the goods in question without giving details of the transportation. The present case is also like the case of M/s.Ranjeev Alloys which has been decided in favour of Revenue by Honble High Court of Punjab & Haryana reported in 2009 (247) ELT 27 (P&H).
3. It is further submitted by ld. JCDR that where there is fraud adjudication cannot be held to be time barred because fraud nullifies everything. He relies on the decision of Apex Court in the case of CCE vs. Candid Enterprises 2001 (130) ELT 404 (SC). So also he says that when there is a loss caused to Revenue, the risk is always with the assessee to suffer unless it comes out with clean hands following the ratio laid down in Aafloat Textiles (I) P. Ltd. 2009 (235) E.L.T. 587 (S.C.). Therefore his prayer is to dismiss the appeal of the appellant.
4. Heard both sides and perused the record.
5. Perusal of para 10.1 to 10.9 of the Appellate order throws light on the modus operandi of the appellant and its collusion before issuance of invoices and there after with Mahavir Prasad & Co. The fake invoices were the medium to avail cenvat credit without actual goods being received by the appellant. In para 10.9 of the impugned order the appellate authority found that bogus transport numbers were mentioned in the invoices and that remained un-rebutted. It was unbelievable how the goods were transported by scooters and three-wheelers and truck belonging to public sector undertaking as well as Government Department. Present case is nothing different from the case before Honble High Court of Punjab and Haryana in Rajeev Alloys (supra).
5. The ld. JCDR brings out the case of fraud committed by the appellant. Methodology adopted by the supplier and the present appellant is only to make undue gain at the cost of Public Revenue. When such a fraud surfaces, Revenue is entitled to the ratio laid down by the Apex Court in the case of Candid Enterprises (Supra). It may be stated that section 17 of the Limitation Act 1963 has embodied cardinal principle that fraud nullifies everything. The fraudulent act of the appellant has caused loss to Revenue. Therefore adjudication is not time barred. Accordingly Revenue is also entitled to the ratio laid down in Aafloat Textiles (I) P. Ltd. (supra). When no further evidence was led today to show that the appellant has come out with clean hands, the appeal is bound to be dismissed. That is ordered.
[Dictated & Pronounced in the open Court].
(D.N.PANDA) JUDICIAL MEMBER Anita