Embed Size (px)
Citation preview
an Qv% IWI; 45F4Izr WITClir; 31540.1414m-I
OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD4
*itzr
3F r4 er Paw, tiffaeRvict• * Mid CENTRAL EXCISE BUILDING, NEAR GOVT. POLYTECHNIC
3thrrairef, 3iPTCMTIT — 380 0115 AMBAWADI, AHMEDABAD - 380 015.
F.No: V.29/15-29/Atlas/ADC/0A-1/2014
Eft T it stft: Date of Order : 30.12.2014
wrt Freer: Date of Issue : 30.12.2014
can! rem. / Passed by: Shri P. M. RAO, JOINT COMMISSIONER ************************************************************************
317171' #./Order-In-Original No.: 48/CX-I Ahmd/JC/PMR/2014 ******************************************
F****.
*,,**********************************
ZE-6- °earl (4t) Pod") arrksr m-Pit fdien arzri t, 3d4' (30141)
Wfcld Id 3 1-1 40dI a ": !Tr Agra. $21 1/4,1141 t This copy is granted free of charge for private use of the person(s) to whom it is sent.
ea <03 fta• r# arra # Tegir 3T-#71z 3,Ta =MO t, c at rfr 31rtA d fdtb~
311ZIWA (3141W), 410-N 3c41 I c, 4.41i4 acqic, 1.ff naa, 31t4rat 3f-gFaraTC-15 dT
1,41t,4 v.v.-1 a S t I 3-4a" rfaMT uT 3TralT ci I al et it 3111-41 31/TaT
3r* saki grstr *-1# c114145 #rr gra-{ tir Si" Ting t*.tv-R $4V2.00/-
ad W- Hilda !ff 12.che Orl =Qv Any person deeming himself aggrieved by this Order may appeal against this order in Form E.A.1 to
Commissioner (Appeals), Central Excise, Central Excise Bhavan, Near Government Polytechnic, Ambawadi, Ahmedabad -15 within sixty days from date of its communication. The appeal should bear a
court fee stamp of Rs.2.00/- only.
3b'cl aid cl~ Z1 Arezli # crrfEr
(3+11-a) faekbaciell, 2001 k 1Wzrg 3
oila -,411%L I Te*urtrirsaa• The Appeal should be filed in form No. accordance with provisions of Rule 3 accompanied with the following:
3ctc1 3141W cif . I Copy of the aforesaid appeal.
1 at ditm- *1 01141
* 39#-R-
tiMdal 14,411 are- : E.A.-1 in duplicate. It
of the Central Excise
t4aV I 3tIllt 30414
3i 311 QI4bltlzwirut
should be filed by the appellants in (Appeals) Rules, 2001. It shall be
*r VT 3A 311101 r ad1IHc1WrardtZT Tal
3Pzirff tt ult 3111-41 act-cI 31TIOT *I rat c1 Bt1ti 2.00/- Wl" crei ei cbC
3MA werr 614 T4110 I Copies of the Decision (one of which at least shall be certified copy of the order appealed against) or copy of the said Order bearing a court fee stamp of Rs.2.00/-.
51:1 311t1T i fdtua Rya. (314771) t 7.5% Wei' 2ff 31,-Tat
aic t 3inaT rail re qiit AT1 1 fa a t chi 33,-WaTa. '414 artig *r
71" tl An appeal agaisnt this order shall lie before the Commissioner (Appeals) on payment of
7.5% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where
penalty alone is in dispute".
I:tat/Reference 4aTaff +Kuril F.No: IV/13-11/P1-1/Atlas-Pharma/13-14 dated
21.04.2014 issued to M/s. Atlas Pharmachem Industries Pvt. Ltd., Vatva, Ahmedabad and Shri Virendra Jyantilal Sutharia, Director of M/s.Suvijay Enterprise Pvt. Ltd., Navrangpura, A'bad.
IA! II I
Pa ge 11 010 No.48/Cx-I Ahmd/JC/PMR/201 4
BRIEF FACTS OF THE CASE:
M/s. Atlas Pharmachem Industries Pvt. Ltd., Plot No. 286-287, Phase-II, GIDC,
Vatva, Ahmedabad-382445 (hereinafter referred to as "the said noticee") having ECC
No. AAGCA2633LXM001 are engaged in the manufacture of 5-Difluoromethoxy -2-
Mercapto-1H-Benzimidazole and 2-Mercapto-5-Mithoxy Benzimidazole falling under
CETSH No. 29309099 of the schedule to the Central Excise Tariff Act, 1985. The said
noticee is availing the benefit of CENVAT credit and paying duty at appropriate rate.
2. During the course of EA-2000 Audit of the said noticee for the period from April
2011 to 2013, it was observed that certain details were missing in the purchase invoices
on which CENVAT credit was availed by the said noticee and on not getting the
satisfactory reply in the matter, the issue was referred to the preventive section for
further investigation.
3. The officers of preventive section visited the factory premises of M/s. Atlas
Pharmachem Industries Pvt. Ltd., Plot No. 286-287, Phase-II, GIDC, Vatva, Ahmedabad
on 10.12.2013 for the inquiry and they carried out the scrutiny of the purchase invoices
not having the vital details of manufacturer of the goods on which the CENVAT credit
was availed by the said noticee. After scrutiny of the documents, statement of Shri
Malkosh M. Danak, Authorized signatory and Store In-Charge of M/s. Atlas
Pharmachem Industries Pvt. Ltd. was recorded on 10/12/2013 under section 14 of the
Central Excise Act, 1944 in which he inter-alia stated that he is looking after all the work
related to stores, packing and Excise in the factory; that he has been authorized by
his company to sign all documents under the Central Excise Act, 1944 and rules
framed there under and by virtue of the same he is giving the statement which is
binding to him and his company and can be used as an evidence in any proceedings
under the Central Excise Act, 1944 and rules framed there under. He further stated
that officers of Central Excise, Preventive Section, Ahmedabad-I visited the factory
premises and verified their manufacturing process of the finished goods manufactured
by them and the manufacturing process was demonstrated to them and the flowchart of
the manufacturing process was enclosed with his statement. He stated that for the
manufacturing of their finished goods they are required to prepare batch/ process sheet
which was also produced and enclosed to his statement; that usually six to seven
days are required to complete the manufacturing process of one batch and during the
manufacturing, time to time testing at the intermediate stages of the processed goods
is being conducting in their in house laboratory in their factory in which they are
engaged in manufacturing of 5-Difluoromethoxy- 2-Mercapto-1HBenzinnidazole
falling under CETSH No. 29309099.
4. The officers also inquired about the details of purchases of 5- Difluoromethoxy-
2-Mercapto-1H-Benzimidazole and Shri Malkosh M. Danak produced the photo copies
of purchase invoices and details thereof. The officers asked him to show batch
Page 1 of 26
Page 12 010 No.48/Cx-I Ahmd/JC/PMR/2014
manufacturing record or any other documents prepared for processing of this
purchased goods in their factory on which he informed that they neither prepare any
batch manufacturing record for their purchased goods nor any other document of
processing. He produced a sheet with title as "intimation sheet for raw material testing'
only. He stated that they purchased these goods in 25 kg bag and repacked it in
container of 25 kg. and pasted their company's label and sold it to their regular buyers.
He stated that their buyers required their goods which are bulk drug intermediate as a
goods manufactured by them in their factory because they need the goods having
followed standards of USFDA and European Standards. He stated that if the goods
does not follow the manufacturing process as per the batch manufacturing record, the
goods will not be acceptable to their buyers and they do not inform to their buyers that
this is bought out goods from the market and packed in container and their company's
test report is prepared after certain tests and dispatched / sold after putting their
company's label on the containers. He again stated that they have not maintained any
other record or document showing any process / treatment carried out on that
purchased goods and therefore not able to show/ produce before the officers on their
demand. Shri Malkosh M. Danak, further stated that the purchase invoices of the said
goods are also lacking certain vital information as required under the Central Excise
Rules, 2002 / Cenvat Credit Rules, 2004 and they have taken Cenvat credit and
utilized the same for the payment of Central Excise duty on the clearance of said
purchased goods considering them as their manufactured goods as per the Chapter
note of chapter 29 of the Central Excise Tariff Act, 1985 and their own finished goods
manufactured by them from the raw material for which the batch manufacturing
records are being maintained by them.
5. Shri Malkosh M. Danak also stated that the process adopted by them at their
factory is more important to justify the quality and specification of said product,
because it is the key raw material of final bulk drugs and on being asked about the
name and address of the manufacturer of the goods viz. 5- Difluoromethoxy-2-
Mercapto-1H-Benzimidazole purchased by them from the second stage dealer M/s.
Suvijay Enterprise Pvt Ltd and cleared by them treating as goods manufactured in
their factory, he stated that he has no knowledge about the manufacturer of the said
goods.
6. Since, the invoices issued by M/s. Suvijay Enterprise Pvt Ltd a registered dealer
were lacking the vital information regarding manufacturer of the goods on which the
CENVAT credit was availed and utilized by the said noticee, the detailed investigation of
the same was felt necessary and therefore, the office premises of dealer M/s. Suvijay
Enterprise Pvt. Ltd., 24, Asia House, 1st Floor, Nr. Swastik Cross Road, Navarangpura,
Ahmedabad was visited by the officers of preventive section on 12.12.2013 and the
officers collected the purchase and sales invoices in respect of which the said noticee
had availed the CENVAT credit and it was iced that M/s. Suvijay Enterprise Pvt. Ltd.
Page 2 of 26
Page 13 010 No.48/0(-1AhmdfICIPMR/20:1 4
had purchased the said goods during the year 2010-11, 2011-12 and so on from M/s.
Shreeji Corporation ( first stage dealer) and M/s. Mahavir trading Co.(second stage
dealer) and after scrutiny of the said sales and purchase invoices, it was noticed that
total seventeen (17) invoices were issued by M/s. Suvijay Enterprise Pvt. Ltd. to the
said noticee which were issued on the basis of purchase invoices issued by M/s.
Mahavir trading Co. as a second stage dealer and therefore, the invoices issued by M/s.
Suvijay Enterprise Pvt. Ltd. in favour of the said noticee becomes invoices issued by the
third stage dealer which are not prescribed for availing CENVAT credit under Cenvat
Credit Rules, 2004 and the CENVAT credit availed by the said noticee on the basis of
these seventeen (17) invoices was liable for reversal/recovery being wrongly availed
and utilized by the said noticee. For further inquiry, statements of concerned persons of
all the dealers viz. M/s. Suvijay Enterprise Pvt. Ltd., M/s. Mahavir trading Co., M/s.
Shreeji Corporation were recorded under section 14 of the Central Excise Act, 1944 and
required documents were withdrawn from them. The details of the said statements are
as under:
7. Statement of Shri Manan Chandrakant Thakkar, proprietor of M/s. Shreeji
Corporation (registered dealer), 203, Chiranjivi Complex, Mahalaxmi Complex, Paldi,
Ahmedabad was recorded on 23.12.2013 under which on being asked, he inter-alia
stated that, he has been running M/s. Shreeji Corporation, 203, Chiranjivi Complex,
Mahalaxmi Complex, Paldi, Ahmedabad since 2008 and they are registered with the
Central Excise as a Dealer and having Registration Number ACMPT9447JHD001 dtd.
14.05.2009, which is falling under AR-IV, Div-V City, Ahmedabad-II Commissionerate
and as a proprietor he is looking after all the daily business of the firm. On being asked
he stated that they are purchasing 5-DIFLUOROMETHOXY-2-MERCAPTO-IH-
BENZIMIDAZOLE & 2-MERCAPTO-5-MITHOXY BENZIMIDAZOLE from M/s. Atlas
Pharmachem Industries Pvt. Ltd., 286-287, Phase-II, GIDC, Vatva, Ahmedabad and
selling the same to the dealers M/s. Suvijay Enterprises Pvt. Ltd., 24, Asia House, 1 st
Floor, Nr. Swastik Cross Road, Navarangpura, Ahmedabad and M/s. Mahavir Trading
Co., A-2, Navarang Tower, opp. Sarthak School, Ghatlodia, Ahmedabad and all the
goods are sold by them as a first stage dealer to both the dealers. He further stated that
during 2010-11 they have purchased total 43 consignments and during 2011-12 they
have purchased total 22 consignments of the above mentioned goods from M/s. Atlas
Pharmachem Ind. Pvt. Ltd. and all the 43 consignments of 2010-11 were sold in 44
consignments to M/s. Suvijay Ent. Pvt. Ltd. and total 22 consignments for the year
2011-12 were sold in 23 consignments, out of which first six consignments were sold to
M/s. Suvijay Ent. Pvt. Ltd. (registered dealer), whereas remaining 17 consignments
were sold to M/s. Mahavir Trading. Co. (registered dealer) and all the purchase and
sales transactions were carried out in Cheques only. Further, he was shown the
worksheet containing details of Cenvat credit passed on by them for the purchases from
M/s. Atlas Pharmachem Ind. Pvt. Ltd. for the year 2010-11 and 2011-12 and the same
were found correct as per the record maintained by them and he put his dated signature
Page 3 of 26
Page 1 4 010 No.48/Cx-I Ahmd/JC/PMR/2014
on the said worksheet in token of confirmation of the same after verifying the same with
their records. He further stated that they have not sold any other goods to M/s. Suvijay
Ent. Pvt. Ltd. and M/s. Mahavir Trading. Co. except mentioned in the worksheet signed
by him and they have not done any transaction of purchase from M/s. Atlas
Pharmachem Ind. Pvt. Ltd. and sales transactions to M/s. Suvijay Ent. Pvt. Ltd. and M/s.
Mahavir Trading. Co. after 29.03.2012. Thereafter, he produced all the original
purchase and sales invoices as per the worksheet alongwith RG23D register and
handed over the same for further investigation to the officers.
8. Statement of Shri Chirag R. Shah, proprietor of M/s. Mahavir Trading
Co.(registered dealer) having address A-2, Navrang Tower, Opp. Sarthak School,
Ghatlodia, Ahmedabad-61 was recorded on 24.12.2013 under which he inter-alia stated
that he has been running M/s. Mahavir Trading Co., A-2, Navrang Tower, Opp. Sarthak
School, Ghatlodia, Ahmedabad-61 since 2007 and they are registered with the Central
Excise as a Dealer and having Registration Number ANVPS7550HD002 dtd.
12.01.2012, which is falling under the jurisdiction of AR-Ill, Div-V City, Ahmedabad-II
Commissionerate and as a proprietor, he is looking after all the daily business of the
firm. On being asked he stated that they are purchasing 5-DIFLUOROMETHOXY-2-
MERCAPT0-1H-BENZIMIDAZOLE & 2-MERCAPT0-5-MITHOXY BENZIMIDAZOLE
and MS SCRAP from M/s. Shreeji Corporation, 203, Chiranjivi Complex, Mahalaxmi
Complex, Paldi, Ahmedabad and selling the same to the dealer M/s. Suvijay Enterprises
Pvt. Ltd., 24, Asia House, 1 st Floor, Nr. Swastik Cross Road, Navarangpura,
Ahmedabad and all the goods were sold by them as a second stage dealer to M/s.
Suvijay Enterprises Pvt. Ltd. Further on being asked, he stated that during 2011-12 they
have purchased total 17 consignments of 5-DIFLUOROMETHOXY-2-MERCAPT0-1H-
BENZIMIDAZOLE & 2-MERCAPTO-5-MITHOXY BENZIMIDAZOLE and all the 17
consignments were sold to M/s. Suvijay Enterprises Pvt. Ltd. only. Further, he stated
that they were purchasing Scrap from M/s. Shreeji Corporation since last three years
which contains the CVD and Central Excise Duty but they have not issued any Cenvat
Invoice passing on the Credit on those purchases. Further, on being asked, he stated
that all the purchase and sales transactions are carried out in Cheques only and he was
shown the worksheet containing details of Cenvat credit passed on by them for the
purchases from M/s. Shreeji Corporation for the year 2011-12 which found to be correct
by him as per the record maintained by them and he put his dated signature on the
worksheet in token of confirmation of the worksheet after verifying the same with their
records. He stated that they have never passed on the Cenvat credit to any other buyer
except the 17 invoices mentioned in the worksheet during the financial year 2011-12
and they have not done any other transaction of purchase from M/s. Shreeji Corporation
and sales transactions to M/s. Suvijay Ent. Pvt. Ltd. after 29.03.2012. Thereafter, he
produced all the original 17 purchase invoices and 17 sales invoices as per the
worksheet along with RG23D register for ~tl e year 2011-12 and handed over the same
U
Page 4 of 26
Page 1 5 010 No.48/Cx-lAhmd/JCPMR/2014
to the officers for further investigation of the matter. Further on being specifically asked
regarding not mentioning of the name and other details of Manufacturer/Importer on the
said 17 invoices issued by him to M/s. Suvijay Enterprise Pvt. Ltd., he stated that M/s.
Mahavir Trading Co. had got Central Excise registration on 12.01.2012 and due to lack
of knowledge and through oversight, they had not mentioned the name of manufacturer
and other details in respect of the Manufacturer/ Importer of the goods they sold to M/s.
Suvijay Enterprise Pvt. Ltd. during the period January'2012 to March'2012.
9. Further, statement of Shri Virendra Jayantilal Sutharia, Director of M/s. Suvijay
Enterprise Pvt. Ltd. (registered dealer), 24, Asia House, 1 st Floor, Nr. Swastik Cross
Road, Navarangpura, Ahmedabad-380009 was recorded on 24.12.2012 under which on
being asked, he inter-alia stated that, he has been running M/s. Suvijay Enterprise Pvt.
Ltd.,24, Asia House, 1 st Floor, Nr. Swastik Cross Road, Navarangpura, Ahmedabad-
380009 since 2006 and they are registered with the Central Excise as a Dealer and
having Registration Number AACCM8083GXDO01 dtd. 02.04.2008, which is falling
under the Jurisdiction of AR-Ill, Div-V City, Ahmedabad-II Commissionerate. As a
Director, he is looking after all the daily business of the firm. On being asked he stated
that they are purchasing 5-DIFLUOROMETHOXY-2-MERCAPTO-1 H-BENZIMIDAZOLE
& 2-MERCAPTO-5-MITHOXY BENZIMIDAZOLE and MS SCRAP from M/s. Shreeji
Corporation, 203, Chiranjivi Complex, Mahalaxmi Complex, Paldi, Ahmedabad and M/s.
Mahavir Trading Co., A-2, Navarang Tower, Opp. Sarthak School, Ghatlodia,
Ahmedabad-61 and selling the same to the M/s. Atlas Pharmachem Industries Pvt. Ltd.,
286-287, Phase-II, GIDC, Vatva, Ahmedabad, Further on being asked, he stated that
during the year 2010-11 they have purchased total 44 consignments and during the
year 2011-12 they have purchased 06 consignments of 5-DIFLUOROMETHOXY-2-
MERCAPT0-1H-BENZIMIDAZOLE & 2-MERCAPTO-5-MITHOXY BENZIMIDAZOLE
from M/s. Shreeji Corporation, 203, Chiranjivi Complex, Mahalaxmi Complex, Paldi,
Ahmedabad and they have also purchased 17 consignments of 5-
DIFLUOROMETHOXY-2-M ERCAPT0-1H-BENZIMIDAZOLE & 2-MERCAPT0-5-
MITHOXY BENZIMIDAZOLE from M/s. Mahavir Trading Co. during the year 2011-12
and all these consignments were sold to M/s. Atlas Pharmachem Industries Pvt. Ltd.
during the year 2010-11 & 2011-12. Further, he stated that they are purchasing Scrap
and Industrial cloths from M/s. Shreeji Corporation and M/s. Mahavir Trading Co. but
they have not issued any Cenvat Invoice passing on the Credit on those purchases.
Further, on being asked, he stated that all the purchase and sales transactions were
carried out in Cheques only. Further, he had been shown the worksheet containing
details of Cenvat credit passed on by them for the 44 purchase invoices for the year
2010-11 and 06 invoices during the year 2011-12 from M/s. Shreeji Corporation and 17
consignments purchased from M/s. Mahavir Trading Co. during the year 2011-12, which
were found correct by him as per the record maintained by them and he put his dated
signature on the said worksheet in token of confirmation of the same after verifying the
Page 5 of 26
Page 1 6 010 No.48/Cx-I Ahmd/JC/PMR/2014
same with their records. Further he stated that they have never passed on the Cenvat
credit to any other buyer except for the 44 invoices during the financial year 2010-11
and for the 23 invoices during the financial year 2011-12 mentioned in the worksheet
and they have not done any other transaction of purchase from M/s. Shreeji Corporation
and M/s. Mahavir Trading Co. and sales transactions to M/s. Atlas Pharmachem
Industries Pvt. Ltd. after 29.03.2012 for issuing the invoices passing the CENVAT credit.
He produced all the original purchase and sales invoices as per the worksheet
alongwith RG23D register for the year 2010-11 & 2011-12 and handed over the same to
the officers for further investigation of the matter. Further, on being specifically asked
regarding not mentioning the name and other details of Manufacturer/Importer in the
invoices issued by them to M/s. Atlas Pharmachem Industries Pvt. Ltd., he stated that
since those details were not available in their purchase invoices issued by M/s. Mahavir
Trading Co. the same is not mentioned by them in their sales invoices and on being
asked about the issuance of Cenvatable invoices on the basis of invoices issued by the
second stage dealer M/s. Mahavir Trading Co., he stated that since this type of dealings
were handled for the first time at their end, this mistake took place by their dealing hand
in their office.
10. Further statement of Shri Malkosh M. Danak, Authorized signatory and Store In-
Charge of M/s. Atlas Pharmachem Industries Pvt. Ltd. was recorded on 26.12.2013 and
he was shown the following documents during recording his statement:
1. His Statement dated 10.12.2013 recorded at the factory premises of M/s. Atlas Pharmachem Industries Pvt. Ltd.
2. Statement dated 23.12.2013 of Shri Manan C. Thakkar, proprietor of M/s. Shreeji Corporation, 203, Chiranjivi Complex, Mahalaxmi Complex, Paldi, Ahmedabad .
3. Statement dated 24.12.2013 of Shri Chirag R. Shah, proprietor of M/s. Mahavir Trading Co., A-2, Navarang Tower, Opp. Sarthak School, Ghatlodia, Ahmedabad-61.
4. Statement dated 24.12.2013 of Shri Virendra Jayantilal Sutharia, Director of M/s. Suvijay Enterprise Pvt. Ltd., 24, 'Asia House, 1 st Floor, Nr. Swastik Cross Road, Navarangpura, Ahmedabad-380009.
5 All the Original 16 Invoices issued by M/s. Atlas Pharmachem Industries Pvt. Ltd., Plot No. 286-287, GIDC, Phaae-II, Ahmedabad to M/s. Shreeji Corporation, 203, Chiranjivi Complex, Mahalaxmi Complex, Paldi, Ahmedabad as mentioned in the Worksheet from SI. No. 7 to 22 for the F. Year 2011-12.
6. All the Original 17 Invoices issued by M/s. Shreeji Corporation, 203, Chiranjivi Complex, Mahalaxmi Complex, Paldi, Ahmedabad to M/s. Mahavir Trading Co., A-2, Navarang Tower, Opp. Sarthak School, Ghatlodia, Ahmedabad-61, as mentioned in the W ksheet from SI. No. 7 to 22 for the F. Year 2011-12.
Page 6 of 26
Pi a g e 7 010 No.48/Cx-I Ahmd/JC/PMR/2014
7. All the Original 17 Invoices issued by M/s. Mahavir Trading Co., A-2, Navarang Tower, Opp. Sarthak School, Ghatlodia, Ahmedabad-61 to M/s. Suvijay Enterprise Pvt. Ltd., 24, Asia House, 1 st Floor, Nr. Swastik Cross Road, Navarangpura, Ahmedabad-380009, as mentioned in the Worksheet from SI. No. 7 to 22 for the F. Year 2011-12.
8. All the Original 17 Invoices issued by M/s. Suvijay Enterprise Pvt. Ltd., 24,
Asia House, 1 st Floor, Nr. Swastik Cross Road, Navarangpura, Ahmedabad-380009 to M/s. Atlas Pharmachem Industries Pvt. Ltd., Plot No. 286-287, GIDC, Phase-II, Ahmedabad, as mentioned in the Worksheet from SI. No. 7
to 22 for the F. Year 2011-12.
9. Worksheet containing details of Cenvat credit taken by M/s. Atlas Pharmachem Industries Pvt. Ltd. on the basis of Central Excise invoices issued by M/s. Suvijay Enterprise Pvt. Ltd. during the year 2010-11 and 2011-12.
After perusal of the above documents Shri Malkosh M. Danak put his dated
signature on all the above documents in token of having its perusal and confirmation
and thereafter, he gave his statement in the Answer to Question form and same is
reproduced as under:
"Q.1. Do you agree with the fact that the credit taken by you in respect of invoices from
Sr. No. 07 to 22 (Total 17 invoices and credit of Rs. 32,40,380/-) of the worksheet which
are issued by M/s. Suvijay Enterprise Pvt. Ltd., 24, Asia House, 1st Floor, Nr. Swastik
Cross Road, Navarangpura, Ahmedabad-09 is received from third stage dealer i.e. M/s.
Shreeji Corporation-First Stage dealer, M/s. Mahavir Trading Co.- Second Stage Dealer
and M/s. Suvijay Enterprise Pvt. Ltd.- Third Stage Dealer?
A.1. Yes, it is after verifying of the documents it is a third stage dealer.
Q.2. Do you agree that as per rule 9(1)(iv) of the Cenvat Credit Rules, 2004, the
Cenvat Credit Shall be taken by the manufacturer on the basis of the invoices issued by
the first stage dealer or second stage dealer only?
A.2. As per the said rule it is correct that the credit shall be taken by the manufacturer
on the basis of invoices issued by the first stage dealer or second stage dealer.
Q.3. Do you agree that the credit in respect of invoices from Sr. No. 07 to 22 (Total 17
invoices and credit of Rs. 32,40,380/-) of the worksheet which are issued by M/s.
Suvijay Enterprise Pvt. Ltd., 24, Asia House, 1 st Floor, Nr. Swastik Cross Road,
Navarangpura, Ahmedabad-09 is received from third stage dealer and you are not
entitled for that credit as per rule 9(1)(iv) of the Cenvat Credit Rules, 2004 and you have
wrongly availed and utilized the credit of Rs. 32,40,380/-?
A.3. we have taken the credit received invoices from M/s. Suvijay Ent. Pvt. Ltd., with
the marking of second stage dealer and which we have taken the credit.
Page 7 of 26
Page 18 010 No.48/cx - i Ahmd/JC/PMR/2014
Q.4. M/s. Suvijay Enterprise Pvt. Ltd. has issued the invoices mentioning as second
stage dealer but actually when issued the invoices they were acting as a third stage
dealer which you have seen in the earlier questions and answers, what is your present
stand on the availment and utilization of the said credit on the basis of invoices issued
by third stage dealer, are you entitle for that credit in view of legal position explained to
you in Q. No. 02 above?
A.4. After seeing the documents of above three dealers on today, I can say that it is a
third stage dealer and it is wrong availment of Cenvat credit on our end. When we
received the material at our factory under central excise invoices from M/s. Suvijay
Enterprise Pvt. Ltd., who is Central Excise registered dealer who issued Central Excise
Invoices as a second stage dealer which is clearly mentioned on the title of the invoices,
therefore, we believed that we were entitled for the Cenvat Credit at the relevant time
and it was a bonafide mistake.
Q.5. Please give the details of Cenvat Credit availed and utilized in respect of 17
invoices issued by M/s. Suvijay Enterprise Pvt. Ltd.
A.5. The details are as under
Credit taken/Availed Utilization of Cenvat Credit Entry No. in part-II
& Date Invoice
No. Amount Entry No. in
part-II Invoice No.
& Date Amount
408/23.01.12 07 303644 410/25.01.12 08 110416 419/30.01.12 09 276040 423/31.01.12 10 124218
TOTAL: 8,14,318/- 427/31.01.12 153 to 174 8,14,318/- 434/07.02.12 11 138020 444/14.02.12 12 138020 453/20.02.12 13 207030 460/22.02.12 14 82812 468/27.02.12 15 138020 473/29.02.12 16 138020
TOTAL: 8,41,922/- 480/29.02.12 177 to 193 8,41,922/- 496/12.03.12 17 138020 509/23.03.12 18 331248 521/26.03.12 19 165624 524/28.03.12 20 165624 527/30.03.12 21 331248 528/30.03.12 22 121128 529/30.03.12 23 331248
TOTAL: 15,84,140/- 533/31.03.12 194 to 212 15,84,140/- G. TOTAL: 32,40,380/- 32,40,380/-
Q.6. Who is looking after the availment and utilization of Cenvat Credit in your firm?
A.6. Shri Hetal Safi was looking after the availment and utilization of Cenvat Credit at
the relevant time in our firm.
Q.7. Was it not noticed while availing the Cenvat Credit in respect of 17 Invoices
mentioned above that the name of the Manufacturer/Importer was not mentioned on the
invoices issued by M/s. Suvijay Enterprise Ltd. a • he basis of which you have
Page 8 of 26
Page 1 9 010 No.48/ca•IninifiC/PMR/2014
taken the credit?
A.7. Day to day activity was done by the clerk and normally every invoice not
scrutinized and it is a lapse on the part of the concern clerk looking after the work at that
time.
Q.8. Was the management aware about the facts that the name of the
Manufacturer/Importer was not mentioned on the invoices issued by M/s. Suvijay
Enterprise Pvt. Ltd. on the basis of which you have taken the credit?
A.8. The Management was not aware of the fact that the name of the
Manufacturer/Importer was not mentioned on the invoices issued by M/s. Suvijay
Enterprise Pvt. Ltd. on the basis of which we have taken the credit. It was noticed during
the Audit by the Central Excise Audit in the month of October 2013.
Q.9. Why the goods originally sold to M/s. Shreeji Corporation was again purchased
by you from M/s. Suvijay Ent. Pvt. Ltd.?
AS. We have orders and the supply was to be carried out immediately therefore, we
purchased our own goods from M/s. Suvijay Enterprises Pvt. Ltd. but we have paid duty
on enhanced value after carrying out necessary repacking, labeling, Quality analysis
and guaranty of this particular product as per requirement of our Customers. There is a
value addition at every stage, taxation part is also increased and no evasion of any
Central Excise Duty.
Q.10 When will you pay the Amount of Cenvat Credit of Rs. 32,40,380/- availed and
utilized on the basis of invoices issued by a third stage dealer as detailed in the Answer
to Question No. 05 above?
A.10 I am not authorized person to take this decision and the same will be decided by
the higher management "
11. From the above investigations and statements of all concerned, it was noticed
that M/s. Atlas Pharmachem Industries Pvt. Ltd.(Manufacturer) and M/s. Suvijay
Enterprise Pvt. Ltd. (registered dealer) colluded with each other with intention to pass
on and to avail the CENVAT credit which was not legally allowed to the said noticee i.e.
M/s. Atlas Pharmachem Industries Pvt. Ltd. as per the Cenvat Credit Rules, 2004. For
doing this, M/s. Suvijay Enterprise Pvt Ltd had wrongly mentioned "Second stage dealer
or subsequent dealer" on the sales invoices issued by them. M/s. Suvijay Enterprise
Pvt. Ltd. in spite of being third stage dealer as the goods purchased by them from M/s.
Mahavir Trading Co. (registered dealer) had issued the said invoices in the capacity of
second stage dealer which is clearly mentioned by them on the invoices issued to M/s.
Suvijay Enterprise Pvt. Ltd. and facilitated the availment of credit to the said noticee.
Further, Shri Malkosh M Danak, Authorised signatory of M/s. Atlas Pharmachem
Industries Pvt. Ltd. has also intentionally and deliberately suppressed the name of the
manufacturer of the said goods which was manufactured in their own factory and having
Page 9 of 26
Page i 10 010 No.48/Cx-I Ahmd/JC/PMR/2014
their labels on the goods. Shri Malkosh M. Danak, Authorized signatory and Store In-
Charge of M/s. Atlas Pharmachem Industries Pvt. Ltd., has also suppressed the fact
that the said goods which was purchased from M/s. Suvijay Enterprise Pvt. Ltd. (dealer)
was the goods manufactured by them in spite of specifically asked to him about name of
the manufacturer while recording his statement on 10.12.2013 he has shown his
ignorance about the manufacturer. It is also confirmed that Shri Malkosh M. Danak,
suppressed the fact regarding manufacturer intentionally because while recording his
statement on 30.12.2013 he replied in question and answer no. 9 as under:
"Q.9. Why the goods originally sold to M/s. Shreeji Corporation was again purchased by you
from M/s. Suvijay Ent. Pvt. Ltd.?
A.9. We have orders and the supply was to be carried out immediately therefore, we
purchased our own goods from M/s. Suvijay Enterprises Pvt. Ltd. but we have paid duty on
enhanced value after carrying out necessary repacking, labeling, Quality analysis and guaranty
of this particular product as per requirement of our Customers. There is a value addition at
every stage, taxation part is also increased and no evasion of any Central Excise Duty."
12. Further statement of Shri Malkosh M Danak, Authorised Signatory of M/s. Atlas
Pharmachem Industries Pvt. Ltd. was recorded on 07.04.2014 which is reproduced as
under:
"Q.1. Please explain by which means of transportation the delivery of the goods
covered under the said 17 invoices as detailed in worksheet was delivered in your
factory and give the details of payment made to the transporter by your company.
A.1. We have received the said goods covered under 17 invoices as detailed in
worksheet by local transport such as camel carts and the transportation charge was
born by the supplier M/s. Suvijay Enterprise Pvt Ltd. and we have not paid anything as
transportation charges.
Q.2. Can you produce the owner of the camel cart who has transported the said
goods to your factory?
A.2. No, we do not have any details regarding address and name of the camel cart
owner who has transported the said goods in our factory. Therefore, it is not possible at
this stage to bring him in the office.
Q.3. Please give the details of payment made to M/s. Suvijay Enterprise Pvt Ltd
against the goods covered under 17 invoices as detailed in worksheet.
A.3. We have made the payment through cheques and the copy of the ledger for the
period from 01.04.2011 to 31.03.2013 of Ws. Suvijay Enterprise Pvt Ltd having the
details of the same is produced herewith as evidence.
Q.4. Have you got any other evidence to prove that the said goods were received in
your factory?
Page 10 of 26
Page I 11 010 No.48/Cx- I Ahmd/JC/PMR/2014
A.4. As per prevailing practice in our factory anything which is received in the factory
is entered in our inward register and the entry regarding receipt of the said goods
covered under the 17 invoices as detailed in the worksheet was also made at the time
of receipt of the goods in the factory by the concerned staff. I hereby produce the self
attested copies of relevant pages of the inward register maintained in our factory as an
evidence of the same."
During the statement Shri Malkosh M Danak has also submitted the copies of
Ledger Account of M/s. Suvijay Enterprise Pvt Ltd for the period from 01/04/2011 to
31/03/2013 and copies of the respective pages of Goods Inward Register in support of
their claim regarding receipt of goods in the factory.
13. Further, vide letter dated 03.01.2014 the said noticee had submitted five (5) post
dated cheques amounting to Rs. 32,40,380/- (Rupees Thirty Two Lacs Fourty Thousand
Three Hundred and Eighty Only) towards the duty liability of wrongly availed and utilized
Cenvat Credit. However, the cheques were given under protest. Details of the cheques
are as under:
Sr. No. Cheque No. Cheque Dated Amount (Rs.)
1 070859 20.01.2014 6,50,000/-
2 070860 20.02.2014 6,50,000/-
3 070861 20.03.2014 6,50,000/-
4 070862 20.04.2014 6,50,000/-
5 070863 20.05.2014 6,40,380/- Total Rs.: 32,40,3801-
Out of above five cheques two cheques no. 070861 dated 20.03.2014 and
070862 dated 20.04.2014 have been returned back to M/s. Atlas Pharmachem Ind. Pvt
Ltd as they had paid the said amount through E-payment mode vide challan no. 50080
dtd. 11.04.2014 and challan no. 50096 dtd. 21.04.2014.
14. From the above answer of Shri Malkosh M. Danak it became clear that they were
having the knowledge that the goods which was purchased by them from M/s. Suvijay
Enterprise Pvt. Ltd. (Dealer) was originally manufactured by them only and since, their
buyers required the goods manufactured by M/s. Atlas Pharmachem Industries Pvt. Ltd.
immediately and to get the CENVAT credit on the basis of invoices issued by M/s.
Suvijay Enterprise Pvt. Ltd. (Dealer) who has issued the said invoices as a third stage
dealer intentionally mentioning on the same as 'second stage dealer and subsequent
dealer' to facilitate the availment of CENVAT credit on the basis of said invoices. Thus,
the said noticee in collusion with M/s. Suvijay Enterprise Pvt. Ltd. suppressed the facts
from the department that the said seventeen (17) invoices were issued by third stage
dealer and wrongly availed and utilized the CENVAT credit amounting to Rs.
32,40,380/- as detailed in worksheet as 'Annexure-A' to this Show Cause Notice and
thus, they have made themselves liable for penalty under the rule 15 of the Cenvat
Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 along with
recovery of the wrongly availed and utilized Cenvat credit of Rs. 32,40,380/- under rule
Page 11 of 26
Page 112 010 No.48/Cx-1 Ahmd/JC/PMR/2014
14 of Cenvat Credit Rules, 2004 read with Section 11A(5) with interest under Section
11AA of the Central Excise Act, 1944 and Shri Virendra Jayantilal Sutharia, Director of
M/s. Suvijay Enterprise Pvt Ltd (Registered Dealer) has also made himself liable for
penalty under rule 26 of the Central Excise Rules, 2002 for issuing the invoices as a
second stage dealer instead of third stage dealer on which the said noticee has wrongly
availed and utilized the Cenvat Credit of Rs. 32,40,380/-.
15. From the facts as stated above it appeared that the said noticee has contravened
the following provisions of the Cenvat Credit Rules, 2004:
Rule 9(1) by taking the Cenvat Credit on the documents issued by third stage
dealer which is not prescribed document for availing Cenvat credit. The Rule is
reproduced as under:
"Rule 9 (1) The CENVAT credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :- (a) an invoice issued by- (i) a manufacturer for clearance of -
(I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer; (II) inputs or capital goods as such;
(ii) an importer;
(iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002;
(iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Central Excise Rules, 2002;"
Rule 9(2) by taking the credit on the basis of invoices which are not containing all
the particulars required. The rule is reproduced as under:
"Rule 9 2 : No CENVAT credit under sub-rule(1) shall be taken unless all the particulars as prescribed under the Central Excise Rules, 2002 or the Service Tax Rules, 1994, as the case may be, are contained in the said document:
Provided that if the said document does not contain all the particulars but contains the details of duty or service tax payable, description of the goods or taxable service, assessable value, Central Excise or Service tax Registration number of the person issuing the invoice, as the case may be, name and address of the factory or warehouse or premises of first or second stage dealers or provider of taxable service, and the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, is satisfied that the goods or services covered by the said document have been received and accounted for in the books of the account of the receiver, he may allow the CENVAT credit;"
Rule 9(5) by not taking the care as a manufacturer, of admissibility of the cenvat
credit on the basis of invoice iss d by the third stage dealer. The rule is
reproduced as under:
Page 12 of 26
Page I 13 010 No.48/Cx-I Ahmd/JC/PMR/2014
"Rule 9 5 : The manufacturer of final products or the provider of output service shall maintain proper records for the receipt, disposal, consumption and inventory of the input and capital goods in which the relevant information regarding the value, duty paid, CENVAT credit taken and utilized, the person from whom the input or capital goods have been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit."
16. The wrongly availed Cenvat credit amounting to Rs. 32,40,380/- is liable to be
recovered under the provisions of rule 14 of the Cenvat Credit Rules, 2004 read with
section 11A(5) of Central Excise Act, 1944. Rule 14 of CCR, 2004 is reproduced as
under:
"Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded.-Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of sections 11A (and 11AA) of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries."
17. Whereas, the goods valued at Rs. 2,91,20,000/- received by the said noticee
from the third stage dealer i.e. M/s. Suvijay Enterprise Pvt. Ltd. during the period 2011-
2012 and on which the CENVAT credit of Rs. 32,40,380/- was availed and utilized
wrongly by the said noticee is also liable for confiscation under Rule 15 of the Cenvat
Credit Rules, 2004 and the said noticee is also liable for penalty under the provisions of
rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC(1)(b) of the Central Excise
Act, 1944. The said provisions are reproduced as under:
"Rule 15 of Cenvat Credit Rules, 2004. Confiscation and penalty.-
(1) If any person, takes or utilises CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these rules, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty not exceeding the duty or service tax on such goods or services, as the case may be, or two thousand rupees, whichever is greater.
(2) In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilised wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Excise Act, or of the rules made thereunder with intent to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of section 11AC of the Excise Act.
(3) In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilised wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of these rules or of the Finance Act or of the rules made thereunder with intent to evade payment of service tax, then, the provider of output service shall also be liable to pay penalty in terms of the provisions of Section 78 of the Finance Act.
(4) Any order under sub-rule (1), sub-rule (2) or sub-rule (3) shall be issued by the Central Excise Officer following the principles of natural justice."
"SECTION 11AC: Penalty for short-levy or non-levy of duty in certain cases. —
(1) The amount of penalty for non-levy or short-levy or non-payment or short payment or erroneous refund shall be as follows :—
Page 13 of 26
Page 1 14
010 No.48/Cx-I Ahmd/JC/PMR/2014
(a) where any duty of excise has not been levied or paid or short-levied or short paid or erroneously refunded, by reason of fraud or collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay a penalty equal to the duty so determined;
(b) where details of any transaction available in the specified records, reveal that any duty of excise has not been levied or paid or short-levied or short- paid or erroneously refunded as referred to in sub-section (5) of section 11A, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay a penalty equal to fifty per cent of the duty so determined;
(c) where any duty as determined under sub-section (10) of section 11A and the interest payable thereon under section 11AA in respect of transactions referred to in clause (b) is paid within thirty days of the date of communication of order of the Central Excise Officer who has determined such duty, the amount of penalty liable to be paid by such person shall be twenty-five per cent of the duty so determined;
(d) where the appellate authority modifies the amount of duty of excise determined by the Central Excise Officer under sub-section (10) of section 11A, then, the amount of penalties and interest payable shall stand modified accordingly and after taking into account the amount of duty of excise so modified, the person who is liable to pay duty as determined under subsection (10) of section 11A shall also be liable to pay such amount of penalty or interest so modified.
Explanation.—For the removal of doubts, it is hereby declared that in a case where a notice has been served under sub-section (4) of section 11A and subsequent to issue of such notice, the Central Excise Officer is of the opinion that the transactions in respect of which notice was issued have been recorded in specified records and the case falls under sub-section (5), penalty equal to fifty per cent of the duty shall be leviable.
(2) Where the amount as modified by the appellate authority is more than the amount determined under sub-section (10) of section 11A by the Central Excise Officer, the time within which the interest or penalty is payable under this Act shall be counted from the date of the order of the appellate authority in respect of such increased amount."
18. From the facts as stated above it appeared that the said noticee had deliberately
and wrongly availed and utilized the Cenvat credit by the reason of :
(a) fraud in as much as the said noticee had availed and utilized Cenvat credit on
the basis of invoices not containing the required particulars and on the basis of invoices
issued by third stage dealer which are not prescribed documents for availing Cenvat
credit and thus, the said noticee had defrauded the revenue to the tune of Rs.
32,40,380/-.
(b) Collusion with the dealers who issued the invoices as a third stage dealer by wrongly
mentioning that the invoices were issued by second stage dealer or subsequent dealer
and not mentioning the name of the manufacturer on the said invoices for availing
wrong Cenvat credit.
(c) Willful mis-statement by not giving the name of manufacturer even though it was
known to them at the time of recording statement dated 10.12.2013 of the authorized
person.
Page 14 of 26
Page I 15 010 No.48/Cx-I Ahmd/JC/PMR/2014
(d) Suppression of facts in as much as not declaring the name of the manufacturer
on the said invoices on which the wrong Cenvat credit was availed and utilized.
The said wrongly availed and utilized Cenvat credit was liable to be recovered under the
provisions of rule 14 of the Cenvat Credit Rules, 2004 read with section 11A(5) of the
Central Excise Act, 1944 by invoking extended period of five year along with interest
payable thereon under section 11AA and liable for penalty under rule 15 of the Cenvat
Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944.
19. Whereas, Shri Virendra Jayantilal Sutharia, Director of M/s. Suvijay Enterprise
Pvt. Ltd. was instrumental in the planned manner in evasion of central excise duty by
wrongly passing on the CENVAT Credit mentioning on the invoices as "second Stage
Dealer" knowingly because the invoices issued by M/s. Mahavir Trading Co. were
clearly having the details of second stage dealer. In the statements of the concerned
authorized persons it was clearly confirmed that M/s. Suvijay Enterprise Pvt. Ltd. had
wrongly passed on the Cenvat credit and M/s. Atlas Pharmachem Industries Pvt. Ltd
wrongly availed and utilized the Cenvat Credit of Rs. 32,40,380/-, which was proved
from the statements of the authorized persons as well as from the records produced by
them. All these acts were deliberate & to defraud the government and they were the
master mind of the entire evasion of Central Excise duty. Therefore, Shri Virendra
Jayantilal Sutharia, Director of M/s. Suvijay Enterprise Pvt. Ltd. has made liable himself
for penalty under rule 26 (2)(ii) of the Central Excise Rules, 2002 for issuing the invoices
on the basis of which M/s. Atlas Pharmachem In Pvt Ltd have availed and utilized the
Cenvat Credit which was ineligible benefit under the Cenvat Credit Rules, 2004. The
said rule 26 is reproduced as under:
"RULE 26. Penalty for certain offences. — (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whichever is greater.
(2) Any person, who issues -
(i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or
(ii) any other document or abets in making such document, on the basis of which the
user of said invoice or document is likely to take or has taken any ineligible benefit
under the Act or the rules made there under like claiming of CENVAT credit under
the CENVAT Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding
the amount of such benefit or five thousand rupees, whichever is greater."
20. Therefore, M/s Atlas Pharmachem Industries Pvt. Ltd., Plot No. 286-287, GIDC,
Phase-II, Ahmedabad were called upon to show cause vide impugned show cause
notice as to why :-
Page 15 of 26
Page 1 16 010 No.48/Cx-I Ahmd/JC/PMR/2014
(i) The amount of Rs.32,40,3801- (Rupees Thirty Two Lakh Forty
Thousand Three Hundred and Eighty only) as detailed in Annexure A'
to the show cause notice should not be demanded and recovered from
them being wrongly availed and utilized Cenvat Credit under the
provisions of rule 14 of the Cenvat Credit Rules, 2004 read with
Section 11A(5) of the Central Excise Act, 1944.
(ii) The Amount of Rs. 26,00,000/- (Rupees Twenty Six Lacs Only)
voluntarily (under protest) deposited vide Cheque Nos. 070859 dated
20.01.2014, Cheque No. 070860 dated 20.02.2014, Challan No. 50080 dated 11.04.2014 (through E-Payment mode) and Challan No.
50096 Dated 21.04.2014 (through E-Payment mode) by M/s. Atlas
Pharmachem Industries Pvt. Ltd. should not be appropriated and
adjusted against the above demand.
(iii) The interest at the applicable rate in force from time to time should not
be demanded and recovered from them on the Central Excise duty
amount of Rs. 32,40,380/- from the due date of its payment till the
actual date of payment of duty under Section 11AA of the Central
Excise Act, 1944.
(iv) The excisable goods valued at Rs. 2,91,20,000/- on which Cenvat
Credit is availed and utilized wrongly should not be confiscated under
Rule 15 of the Cenvat Credit Rules, 2004.
(v) The penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with
read with Section 11AC(1)(b) of the Central Excise Act, 1944 should
not be imposed upon them.
21 Shri Virendra Jyantilal Sutharia, Director of M/s. Suvijay Enterprise Pvt. Ltd. wsa
also called upon to show cause as to why penalty should not be imposed on him under
Rule 26 of CER, 2002.
DEFENCE SUBMISSIONS:
DEFENCE REPLY BY M/S ATLAS PHARMACHEM INDUSTRIES PVT. LTD.:
22.1 M/s. Atlas Pharmachem Industries Pvt. Ltd. submitted their written submission
dated 5/8/2014, wherein at the outset, they denied all the averments and allegations
made in the SCN and submitted that there is neither duty evasion nor is any intension of
duty evasion; that there is nothing in the statements recorded and records produced
which may be indicative that there is any evasion which has taken place or the
government is defrauded; that the duty credit was taken by them on the basis of the
Page 16 of 26
Page I 17 010 No.48/Cx-I Ahmd/JC/PMR/2014
invoices issued by the dealer and there was value addition on the goods in respect of
which credit has been taken.
22.2 They further stated that the goods on which credit was taken and value was
added were thus goods manufactured as per Chapter note of Chapter 29 of the Central
Excise Tariff Act, 1985; that the duty had been discharged as paid on the goods so
manufactured and cleared by them; that since duty has been paid, there arises no
question of duty evasion as such there was no purpose to defraud government; that
further there is no confession of evasion in the statements.
22.3 They further submitted that as far as the allegation of contravention of Rule 9(1)
of Cenvat Credit Rules, 2004 is concerned, it is alleged that Shri Virendra J Sutharia,
Director of M/s Suvijay Enterprises was instrumental in the planned manner in evasion
of central excise duty by wrongly passing on the cenvat credit mentioning on the
invoices as "Second Stage Dealer". Thus it is undisputed fact that the invoices, in
question were issued as mentioned on the invoices as "Second Stage Dealer";
therefore the noticee had enough reason that the same was issued by the second stage
dealer and acting on such reason, they had taken credit.
22.4 That with regard to allegations of contravention of Rule 9(2) of Cenvat Credit
Rules, 2004, they stated that the said rule provides to contain, inter alia, the particulars
of the name and address of the Factory OR warehouse OR premises of first Or second
stage dealers. Thus it is submitted that the details of either of these are required to be
mentioned in the invoices and it can be seen that all the invoices were containing the
names of the first stage dealer.
22.5 That as regards the contravention of Rule 9(5) of Cenvat Credit Rules, 2004, the
said rule requires maintaining, inter alia, records of the person from whom the input or
capital goods have been procured. In this regard they submitted that they have
maintained all the prescribed records, including the records in respect of the person
from whom the input or capital goods have been procured. They further submitted that
the receipt of the goods in factory is also a non-controverted fact; that the payment in
respect of the goods in question had been made through banking channel by way of
account payee cheques only; that when duty paid on the manufactured goods,
manufactured from the goods on which cenvat credit was taken by M/s Atlas, has been
accepted by the Deptt. as is evident from the fact that the assessment of Monthly
returns (i.e. E.R.1 return) for the months of January — 2012 to March-2012 have been
accepted by the Deptt. as no query raised or observations made against such
assessment. Therefore, by reversal of Cenvat credit insisted by the department and
done by them by way of cash payment, there is double payment of duty which is not
permissible in law. They relied upon following decisions:
Page 17 of 26
Page 1 18 010 No.48/Cx-I AhmdfIC/PMR/2014
i) Colour Roof (India) Ltd. vs. Commissioner of C.Ex., Raigad (2014—TIOL-628-
CESTAT-Mum)
ii) Commissioner of C.Ex., Ahmedabad-Ill vs. Nahar Granites Ltd. (2014—TIOL-
582-HC-Ahm-CX)
iii) M/s Soya Ispat Alloys Ltd. vs. Commissioner of C.Ex., Bolpur (2012—TIOL-
1913-CESTAT-Kol.)
iv) M/s Tata Metaliks Ltd. vs. Commissioner of C.Ex., Haldia (2011—TIOL-1789-
CESTAT-Kol.)
v) M/s Ajinkya Enterprises vs. Commissioner of C.Ex., Pune-III (2011—TIOL-
1333-CESTAT-Mum.)
22.6 As regards the allegations of fraud, collusion, willful mis-statement and
suppression of facts, they submitted that the duty has been paid and accepted by the
department, there cannot be any question of evasion and accordingly, there is no fraud;
that further, nowhere in the statement of the authorized signatory, it is proved in any
manner that the noticee had suppressed the fact regarding manufacturer and that non-
declaration of manufacturer's details in the invoices is not on part of the noticee and the
Rule 9(5) requires to maintain, inter alia, records of the person from whom the input or
capital goods have been procured, not necessarily the name of the manufacturer.
22.7 They concluded that in view of the submission made above, there arises no
question of recovery of alleged wrongly availed cenvat credit, interest thereon,
imposition of penalty and confiscation of goods.The noticee also requested to be heard
in person in case of adverse decision.
DEFENCE REPLY BY SHRI VIRENDRA J. SUTHARIA:
23.1 Shri Virendra Jayantilal Sutharia, Director of M/s. Suvijay Enterprise Pvt. Ltd.
submitted is written reply dated 05/08/2014, wherein at the outset, he denied all the
averments and allegations made in the SCN and submitted that the amount of cenvat
credit passed on by them to M/s Atlas was without any fraud or collusion and was
passed on out of mistake only by mentioning on the invoices as "Second Stage Dealer"
and no benefit has been derived or even alleged to have been derived by him.
23.2 He further submitted that there is neither duty evasion nor is any intention of duty
evasion. There is nothing in the statements recorded and records produced which may
be indicative that there is any evasion which has taken place or the government is
defrauded. The duty credit was taken by M/s Atlas on the basis of the invoices issued
by them and there was value addition on the goods in respect of which credit has been
taken. The goods on which credit was taken and value was added were thus goods
manufactured as per Chapter note of Chapter 29 of the Central Excise Tariff Act, 1985.
The duty had been discharged as paid on he goods so anufactured and cleared by
Page 18 of 26
Page 1 19
..010 2 V
M/s Atlas. Since duty has been paid, there arises no question of duty evasion. He
argued that there was no confession of evasion in the statements.
23.3 He submitted that when the receipt of goods in factory and the clearance of the
final products on payment of duty from the factory is an undisputed and non-
controverted fact, there arises no question of any evasion and when there is no evasion,
there arises no question of any revenue defraudment. He stated that the payment in
respect of the goods in question had been made through banking channel by way of
account payee cheques only; that when duty paid on the manufactured goods,
manufactured from the goods on which cenvat credit was taken by M/s Atlas, has been
accepted by the Deptt., the consequential act of reversal of such cenvat credit renders
the passing of cenvat credit though mistakenly, as a revenue neutral and procedural
lapse only.
23.4 He relied upon the following decisions in support of his contention
i) Tata Motors Ltd. vs. Commissioner of C.Ex., Jamshedpur [2006 (197)
E.L.T.223 (Tri. —Kolk)]
ii) Temple Packaging Pvt. Ltd. vs. Commissioner of C.Ex., Mumbai [2007 (213)
E.L.T. 268 (Tri. —Mum)]
iii) Commissioner of C.Ex., Ahmedabad vs. Satyen Dyes [2001 (134) E.L.T. 655
(Tri. —LB)]
PERSONAL HEARING:
24.1 The personal hearing in the matter was held on 05/11/2014, wherein Shri J.T.
Vyas, consultant appeared for the same and reiterated submissions made in their
defense reply dated 05/8/2014. He further submitted that there is no allegation that the
registration is false. He requested to decide the issue on that basis. He also submitted
that value has been enhanced and the duty has been paid thereon. He also submitted
one case law in case of M/s. Victor Pushin Cords Pvt. Ltd.
24.2 Another personal hearing was held on 10/12/2014 on account of change of
adjudicating authority. Shri J.T. Vyas, consultant appeared for the same and reiterated
submissions made in their defense reply dated 05/8/2014. He further submitted that the
credit was availed on the basis of dealer's invoices who represented themselves as
second stage dealer ( RUD 10). Further the goods was received and cleared on
payment of duty on enhanced value of the goods after carrying out certain processes.
He relied upon citation 2013(290) ELT 61 (Guj). He requested to take on record above
submissions while adjudicating the SCN.
Page 19 of 26
had enough reason that the same was issu by the and stage dealer and acting on
Page 20 of 26
Page 120 010 No.48/Cx-I Ahmd/JC/PMR/2014
DISCUSSIONS AND FINDINGS:
25 I have carefully gone through the case records including the oral and written
submissions made by the noticees. The basic issue to be dealt with in this case is
eligibility of Cenvat credit availed by M/s. Atlas Pharmachem Industries Pvt. Ltd. on the
basis of invoices issued by a third stage dealer namely M/s. Suvijay Enterprise Pvt. Ltd.
26 From the facts of the case, it is undisputed that M/s. Atlas Pharmachem
Industries Pvt. Ltd. had availed Cenvat credit amounting to Rs. 32,40,380/- on the basis
of input invoices issued by M/s. Suvijay Enterprise Pvt. Ltd., who was a third stage
dealer in as much as they (M/s. Suvijay Enterprise Pvt. Ltd. ) had purchased said
goods from M/s. Mahavir Trading Co., who has issued the invoices in capacity of
second stage dealer, which was clearly endorsed by them (M/s. Mahavir Trading Co.)
on the invoices issued by them.
27 Thus, considering the definition of 'second stage dealer" as defined under Rule
2(s) of CCR, 2004 and eligible documents prescribed under Rule 9(1) of CCR, 2004 for
the purpose of taking Cenvat credit, there is no doubt that invoice issued by a third
stage dealer are not valid documents for the purpose of taking Cenvat credit under
CCR, 2004. The provisions of said Rule 9(1) ibid are already mentioned in the
impugned show cause notice and I would not like to reiterate the same here.
28 As regards validity of invoices issued by third stage dealer for the purpose of
availing Cenvat credit thereon, I would like to rely upon the recent decision of Hon'ble
Tribunal in case of M/s. R.S. Metals Pvt. Ltd. Vs CCE, Jaipur ( 2014(3) ECS (118) ( Tri-
Del), wherein it has been clearly held that "In terms of Rule 7 of the 2002 rules, invoices
on the basis of which Cenvat credit can be availed should be furnished either by a first
stage or a second stage dealer. Since M/s. Shanti Lal & Brothers is established to be a
third stage dealer the appellant is seen to have availed Cenvat credit on the basis of
invoices which are not valid and authorized by the relevant rules."Thus, it is evident that
the issue on hand is no more res Integra and it is well established that the invoices
issued by third stage dealer is not valid for taking Cenvat credit under the statute. As
such I have no hesitation in holding that M/s. Atlas Pharmachem Industries Pvt. Ltd. had
wrongly availed Cenvat credit on the basis of invoices issued by M/s. Suvijay Enterprise
Pvt. Ltd., who was a third stage dealer in this case.
29.1 Now coming to the defense submissions made by M/s. Atlas Pharmachem
Industries Pvt. Ltd., I find that they have mainly argued that the duty credit was taken by
them on the basis of the invoices issued by the dealer and there was value addition on
the goods in respect of which credit has been taken; that the invoices, in question were
issued as mentioned on the invoices as "Second Stage Dealer"; therefore the noticee
Page I 21 010 No.48/Cx-I Ahmd/JC/PMR/2014
such reason, they had taken credit; that the duty has been paid and which has been
accepted by the department hence there cannot be any question of evasion; that by
reversal of Cenvat credit insisted by the department and done by them by way of cash
payment, there is double payment of duty which is not permissible in law. They also
relied upon various citations.
29.2.1 At the outset, I find that the arguments out forward by the assessee are on
very weak footings in the backdrop of the facts of the case. The fact that there was
value addition on the goods on which they had taken Cenvat credit does not give them
blanket permission to avail Cenvat credit on duty paid on such goods without complying
with the statutory provisions, which are mandatory in nature. As per the statute it is
undisputed that the Cenvat credit can be taken only based on valid documents as
prescribed, and invoice issued by a third stage dealer is not a valid document for the
said purpose. The department has never disputed the value addition in this case.
29.2.2 As regards their contention that the invoices, in question were issued as
mentioned on the invoices as "Second Stage Dealer" and therefore they had enough
reason that the same was issued by the second stage dealer and acting on such
reason, they had taken credit, I find that looking to the whole chain of transactions in
this case, it is apparent that the assessee was very well aware of the fact that they had
purchased their own goods from M/s. Suvijay Enterprise Pvt. Ltd. and also the fact that
the invoices issued by M/s. Suvijay Enterprise Pvt. Ltd. was in capacity of third stage
dealer. Further, the assessee being a very old company should be well aware with the
provisions of Central Excise statute, as per which it is mandatory to mention the name
of the manufacturer in the invoices issued by a registered dealer. The deliberate
suppression of said facts by M/s. Suvijay Enterprise Pvt. Ltd. was never questioned by
the assessee and on the contrary, it was clearly admitted by Shri Malkosh M. Danak,
authorized signatory of the assessee in his statement recorded u/s 14 of CEA, 1944 that
they had purchased their own goods from M/s. Suvijay Enterprise Pvt. Ltd., in a n
answer to question as under:
"Q.9. Why the goods originally sold to M/s. Shreeji Corporation was again purchased by you
from M/s. Suvijay Ent. Pvt. Ltd.?
A.9. We have orders and the supply was to be carried out immediately therefore, we
purchased our own goods from M/s. Suvijay Enterprises Pvt. Ltd. but we have paid duty on
enhanced value after carrying out necessary repacking, labeling, Quality analysis and guaranty
of this particular product as per requirement of our Customers. There is a value addition at
every stage, taxation part is also increased and no evasion of any Central Excise Duty."
Thus, it is evident that the assessee had in collusion with M/s. Suvijay Enterprise Pvt.
Ltd., had wrongly availed the Cenvat credit based on invalid documents. The whole
chain of transactions was well within the knowledge of both the assessee and M/s.
Suvijay Enterprise Pvt. Ltd.
Page 21 of 26
Page 1 22 010 No.48/Cx-I Ahmd/JC/PMR/2014
29.2.3 As regards their argument that when duty payment is accepted by the
department, there cannot be any evasion, I find that this is not a case of evasion of duty
on clearance of final products manufactured and cleared by them. The acceptance of
duty in monthly returns is based on self assessment procedure and unless the
documents/records maintained by the assessee is audited or investigated such facts of
wrong availment of Cenvat credit cannot be unearthed. The audit of the records of the
assessee and further investigation in the matter has resulted in the emergence of said
facts of wrong availment of Cenvat credit in question.
29.2.4.1 As regards citations relied upon by the assessee, I find that they have no
relevance in the matter and have been misplaced by the assessee just to confuse the
adjudicating authority. For instance, I find that in case of Colour Roof (India) Ltd. vs.
Commissioner of C.Ex., Raigad and M/s. Ajinkya Enterprises Vs CCE, Pune-III, the
issue pertained to whether the activity carried out amounts to manufacture or not, which
is not the case on hand. Similarly in case of M/s. Nahar Granites Ltd, relied upon by
them, it was a matter of classification by supplier manufacturer, which is also not the
case on hand. In case of M/s. Tata Metaliks Ltd. relied upon by the assessee, the
matter pertained to payment of duty on exempted goods by material supplier, which
again is not the issue before me. Thus, I find that all the citations relied upon by the
assessee are irrelevant and have no bearing on this case.
29.2.4.2 Further, I find that the Hon'ble S.C. in the case of CCE, Calcutta Vs
Alnoori Tobacco Products (2004 (170) ELT 135 (SC) has ordered that facts of decisions
relied upon have to be shown to fit factual situation of a given case and without such
discussion, reliance could not be placed on a decision and that circumstantial flexibility,
one additional or different fact may make world of difference between conclusions in two
cases.
29.2.5 As regards their argument that by reversal of Cenvat credit insisted by the
department and done by them by way of cash payment, there is double payment of duty
which is not permissible in law, I find that reversal of wrongly taken credit which is not
admissible under the statute and payment of duty on final product are two different
issues and cannot be construed as double payment in any manner. The argument put
forth by the assessee is totally whimsical and cannot be entertained.
29.3.1 As regards the allegations of fraud, collusion, willful mis-statement and
suppression of facts, they had mainly reiterated the above submissions and contended
that there was no suppression of facts or fraud on their part. In this regard, I have
already given my at length findings on all the submissions made by the assessee and
hence I may not like to repeat the same here. The collusion between the assessee and
M/s. Suvijay Enterprise Pvt. Ltd. is clearly established in this case and the fact that
Page 22 of 26
Page I 23 010 No.48/Cx-I Ahmd/JC/PMR/2014
entire chain of transactions including the fact that they were itself manufacturer of the
goods in question was well within the knowledge of the assessee. Thus, the allegations
of suppression of facts and collusions on the assessee are beyond the shadow of
doubts and are clearly substantiated from the facts of the case on hand. Further,
various courts including Apex court have clearly laid down the principle that tax liability
is a civil obligation and therefore intent to evade payment of duty cannot be established
by peering into the minds of the tax payer but has to be established through evaluation
of Tax behavior. With introduction of self removal procedure and self assessment of
excise duty, a higher responsibility has been cast on the assessee to conform to the
higher standard of information disclosure. The facts of the case and my above findings
on the issue clearly indicate tax behavior with intent to evade payment of duty on part of
the assessee.
29.3.2 Further in terms of provisions of Rule 9(2) of CCR, 2004, it is clearly provided
that no Cenvat credit shall be taken unless the requisite particulars are mentioned in the
valid document based on which the credit is taken. Also provisions of Rule 9(5) ibid cast
obligation of burden of proof upon the manufacturer taking such credit, regarding the
admissibility of the CENVAT. In the instant case, the assessee has clearly failed to
comply with the said provisions.
30 In light of the above facts, it is clearly evident that the said assessee had wrongly
availed Cenvat credit amounting to Rs. 32,40,380/- on the basis of invalid documents by
way of suppression of facts, collusion and fraud with intent to evade payment of duty.
They have also contravened the provisions of Rule 9 of CCR, 2004. Therefore, the said
wrongly availed Cenvat credit is required to be recovered from them by invoking the
extended period in terms of provisions of Rule 14 of CCR, 2004 read with Section
11A(5) of CEA, 1944. I also find that the assessee had paid an amount of
Rs. 26,000,00/- under protest during the course of investigation as detailed in the show
cause notice. I find that their claim of protest stands vacated in light of the findings in
foregoing paras. They are also required to pay interest in terms of provisions of Rule 14
ibid read with Section 11AA of CEA, 1944. The goods valued at Rs. 2,91,20,000/- on
which the said assessee had wrongly availed Cenvat credit as aforesaid are also liable
for confiscation in terms of provisions of Rule 15 of CCR, 2004. The said assessee is
also liable to penalty under Rule 15(2) of CCR, 2004 read with Section 11AC (1)(b) of
CEA, 1944.
31.1 I further find that Shri Virendra Jayantilal Sutharia, Director of M/s. Suvijay
Enterprise Pvt. Ltd. was instrumental in the planned manner in evasion of central excise
duty by wrongly passing on the CENVAT Credit mentioning on the invoices as "second
Stage Dealer" knowingly because the invoices issued by M/s. Mahavir Trading Co. were
clearly having the details of second stage dealer. In the statements of the concerned
authorized persons it was clearly confirme•that M/s. Suvijay Enterprise Pvt. Ltd. had
Page 23 of 26
Page 1 24 010 No.48/Cx-I Ahmd/JC/PMR/2014
wrongly passed on the Cenvat credit and M/s. Atlas Pharmachem Industries Pvt. Ltd
wrongly availed and utilized the Cenvat Credit of Rs. 32,40,380/-, which was proved
from the statements of the authorized persons as well as from the records produced by
them. All these acts were deliberate & to defraud the government. Therefore, Shri
Virendra Jayantilal Sutharia, Director of M/s. Suvijay Enterprise Pvt. Ltd. has made
himself liable himself for penalty under rule 26 (2)(ii) of the Central Excise Rules, 2002
for issuing the invoices on the basis of which M/s. Atlas Pharmachem Ind. Pvt Ltd have
availed and utilized the Cenvat Credit which was ineligible benefit under the Cenvat
Credit Rules, 2004.
31.2 Shri Virendra Jayantilal Sutharia, Director of M/s. Suvijay Enterprise Pvt. Ltd. in
their written submission has mainly reiterated the arguments put forth by M/s. Atlas
Pharmachem Ind. Pvt Ltd, on which I have already given my findings as above and I
may not repeat the same here. They have relying on various citations has argued that
the passing of Cenvat credit on their part as alleged in the SCN was through mistake
and was mere procedural lapse. In this regard I find that the said act of passing of
Cenvat credit on invalid documents suppressing the facts about the name of
manufacturer on part of M/s. Suvijay Enterprise Pvt. Ltd. was clearly in collusion with
M/s. Atlas Pharmachem Ind. Pvt Ltd. Shri Virendra Jayantilal Sutharia, Director of M/s.
Suvijay Enterprise Pvt. Ltd. was actively involved in the transactions in question and has
abetted M/s. Atlas Pharmachem Ind. Pvt Ltd. in wrong availing of Cenvat credit as afore
discussed. As such I am convinced to hold that Shri Virendra Jayantilal Sutharia,
Director of M/s. Suvijay Enterprise Pvt. Ltd. has rendered himself liable for personal
penalty in terms of Rule 26 of CER, 2002.
31.3 As regards reliance placed by Shri Virendra Jayantilal Sutharia, Director of M/s.
Suvijay Enterprise Pvt. Ltd., I find that the issues covered in therein pertained to non
declaration of input/output , hand written serial number of invoices and storing of goods
in adjacent to registered premises, which have been held as procedural lapses by the
judicial forums. However, as already discussed above, the invoice issued by wrongly
mentioning as being issued by "Second Stage Dealer" and suppressing the name of
manufacturer in the invoices cannot be by any stretch of imagination considered as
mere procedural lapses. The collusion in this case is clearly established as discussed in
the above paras. Thus, I find that the citations relied upon by the noticee have no
bearings on the matter.
32 In view of the above, I pass the following order in the matter:
ORDER
(i)
I confirm the demand of Rs.32,40,380/- (Rupees Thirty Two Lakh Forty
Thousand Three Hundred and Eighty only) as detailed in Annexure A'
to the show cause notice and order to be recovered from M/s. Atlas
Page 24 of 26
Page I 25 010 No.48/Cx-lAhmd/JC/PMR/2014
Pharmachem Ind. Pvt Ltd. being wrongly availed and utilized Cenvat
Credit under the provisions of rule 14 of the Cenvat Credit Rules, 2004
read with Section 11A(5) and Section 11(10) of the Central Excise Act,
1944.
(ii) I order to appropriate the Amount of Rs. 26,00,000/- (Rupees Twenty
Six Lacs Only) paid under protest by M/s. Atlas Pharmachem
Industries Pvt. Ltd. against the above demand. Their claim of protest
stands vacated in light of the findings in foregoing paras.
(iii) I order to recover interest at the applicable rate under Section 11AA of
the Central Excise Act, 1944.
(iv) I hold the excisable goods valued at Rs. 2,91,20,000/- on which
Cenvat Credit is availed and utilized wrongly as liable for confiscation
under Rule 15 of the Cenvat Credit Rules, 2004.However, since the
said goods are not physically available, I refrain from actual
confiscation. However, I impose redemption fine of Rs.75,00,000/-
(Rupee Seventy Five lacs only) in lieu of confiscation.
(v) I impose penalty of Rs. 16,20,190/- ( Rupees Sixteen :Lakhs Twenty
Thousand One Hundred and Ninety only ) ( 50% of Rs.32,40,380/-)
under Rule 15 of the Cenvat Credit Rules, 2004 read with read with
Section 11AC(1)(b) of the Central Excise Act, 1944 upon M/s. Atlas
Pharmachem Industries Pvt. Ltd.
(vi) I impose penalty of Rs.32,00,000/- ( Rupees Thirty Two Lacs only)
upon Shri Virendra Jyantilal Sutharia, Director of M/s. Suvijay
Enterprise Pvt. Ltd. under Rule 26 of CER, 2002 on the grounds as
discussed in foregoing paras.
33 In terms of provision of Section 11AC (1)(c) ibid, M/s. Atlas Pharmachem
Industries Pvt. Ltd. has an option of paying reduced penalty of 25% subject to
fulfillment of conditions laid down therein. Accordingly, M/s. Atlas Pharmachem
Industries Pvt. Ltd. are given an option to avail the offer of payment of reduced
penalty i.e. 25% of the Cenvat Credit/ duty amount confirmed, under Section
11AC(1) (c) of the Central Excise Act, 1944, subject to the condition that the entire
amount of wrongly availed Cenvat credit/duty amount determined and confirmed
along with interest at the appropriate rate and the 25% of duty ( Cenvat credit)
amount determined as penalty, is paid within the period of thirty days, of the
communication /receipt of this order. If the same is not paid within 30 days of receipt
of the order, then the said option will not be available to them and they will be liable
Page 25 of 26
Page j 26 010 No.48/Cx-I Ahmd/JC/PMR/2014
to pay the entire amount of penalty as imposed on them, under Section 11AC of the
Central Excise Act, 1944.
39 The Show cause Notice issued to M/s. M/s. Atlas Pharmachem Industries Pvt. Ltd. Ahmedabad vide F.No. IV/1 3-11/P1-1/ATLAS-PHARMA/13-14 dated 21.4.2014 stands disposed of in above manner.
Rao) Joint Commissioner,
Central Excise, Ahmedabad-I
F.No. V.29/15-29/Atlas/ADC/0A-1/2014
Ahmedabad, Date:30 .12 .2014 BY RPAD/Hand Delivery
To,
(1) M/s. Atlas Pharmachem Industries Pvt. Ltd. Ahmedabad.
(2) Shri Virendra Jayantilal Sutharia, Director of Asia House, 1st Floor, Nr. Swastik Cross 380009.
, Plot No. 286-287, GIDC, Phase-II,
M/s. Suvijay Enterprise Pvt. Ltd., 24, Road, Navarangpura, Ahmedabad-
Copy to:
(1) The Commissioner, Central Excise, Ahmedabad-I.( Attn. A.C. (RRA)) (2) The Deputy Commissioner, Central Excise, Division-III, Ahmedabad-I. (3) The Superintendent, AR-Ill, Division-III, Ahmedabad I. (4) The TAR Section
J5r7 Systems "-v (6) Guard file.
Page 26 of 26
