BHAGYALAXMI PRINTS PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed to set aside the order dtd. 22/7/2021 passed by the respondent no.4 herein - Joint Commissioner of GST and Excise, Surat.

(2.) Facts in brief are that the petitioner is an individual processor of grey fabrics. It is engaged in the processing of man made fabrics falling under Chapter 5406 of Central Excise Tariff Act, 1985. It is availing CENVAT credit on grey fabrics received from grey manufacturers / dealers. According to the department, during scrutiny of ER-1 returns for the months of April and July 2004, it was noticed that the assessee had availed and utilized CENVAT credit on the basis of invoices issued by various dealers/merchants/manufacturers/weavers of grey fabrics. According to the department, on an inquiry it was revealed that the petitioner had availed CENVAT credit amount of Rs.15,40,481.00 during the said period, on the strength of invoices issued by fake/bogus/non-existing units. A show cause notice was accordingly issued. After the remand proceedings and after giving an opportunity of personal hearing, by the impugned order, the respondent no.4 found that the case of the petitioner was not the same as the one settled by the judgement of this Court in case of Prayagraj Dyeing & Printing Mills Pvt. Ltd. v. Union of India reported in 2013 (290) E.L.T. 61 (Guj.). According to the department, in the instant case, though grey fabric manufactures were registered with the Central Excise, they were found to be fake, bogus and non-existent. In the investigation so conducted, according to the department, when it was found that the dealers were fake, the burden of proof that they existed, shifted on the person against whom the allegations were made and therefore in the opinion of the department, it was a clear case that the petitioner had fraudulently availed CENVAT credit. By the impugned order therefore the respondent no.4 confirmed the demand of CENVAT credit of Rs.15,40,481.00 and also imposed a penalty. That order is under challenge before this Court.

(3.) Mr.S.S.Iyer learned counsel for the petitioner raised following contentions: