Decided on April 20,2015

Commissioner Of C. Ex., Delhi -Iii Appellant
J.D. Auto Electricals (P) Ltd. Respondents


ASHOK JINDAL,J - (1.)REVENUE has filed the appeal against the impugned order dropping the demands confirmed against the respondent.
(2.)The brief facts of the case are that respondents is engaged in the manufacture of thermal wiring harnesses and registered with the department. On the basis of information received by the department that M/s. Arihanta Metal Corpn. a registered dealer is dealing in brass sheets, brass circles copper strips have procured the goods from M/s. Agarwal Metal Works and altered the description of goods by issuing invoices to the respondent showing the description of the goods as brass sheets instead of brass circles/strips. Therefore, it was alleged against the respondent that the respondent availed inadmissible Cenvat credit without actually receiving the goods with this modus operandi, M/s. Arihanta Metal Corpn. have diverted the duty paid brass circles/strips in the open market. On that basis show cause notice was issued to the respondent for denial of Cenvat credit fraudulently taken and thereafter duty should not be demanded and recovered along with interest and why not to be penalized. The show cause notice was adjudicated, demand of duty along with interest was confirmed, penalty was also imposed. That order was challenged by the respondents before Commissioner (Appeals) who set aside the order of adjudication. Therefore, Revenue is before me.
Respondent has also filed cross -objection against the appeal filed by the Revenue.

(3.)THE learned AR submits that as a result of investigation, it was found that M/s. AMC procured the duty paid brass strips/circles from M/s. Agarwal Metal Works and passed on the same to the respondent by issuing the cenvatable invoices by showing the description of goods as brass sheets. Therefore, the respondents has wrongly taken the Cenvat credit and utilized the same as no duty has been paid to M/s. AMC on brass sheets. It is also submitted that as per Rule 9(2) of Cenvat Credit Rules, 2004, a manufacturer/producer while taking Cenvat credit on inputs shall take reasonable steps to ensure that inputs in respect of which, has taken the Cenvat credit are goods on which appropriate duty of Excise as indicated in the documents are accompanying the goods has been paid. As it is clear that respondent has taken and utilized the Cenvat credit wrongly, on account of fraud, collusion with M/s. AMC by altering the description of the goods in purchase invoice issued enabling the respondents to avail the Cenvat credit and the respondents has suppressed the material fact with sole and willful intent to avail inadmissible Cenvat credit. Therefore, impugned order has to be set aside.

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