2008 (12) TMI 584 - AT - Central Excise

Summary

Issues:
Prayer to dispense with pre-deposit of duty and penalty.

Analysis:
The judgment deals with an application seeking to waive the pre-deposit condition of duty and penalty imposed on a company and its director. The duty was confirmed due to disallowed Cenvat credit on invoices later found to be fake, making the suppliers bogus. The responsibility of verifying supplier genuineness lies with the credit availor under Rule 7(2) of Cenvat Credit Rules. The director acknowledged the inadmissibility of availing Cenvat credit on such invoices. The tribunal noted the lack of efforts by the appellants to establish supplier identity or prove financial hardship. Consequently, the tribunal directed the appellants to deposit 20% of the duty amount within 8 weeks, with the balance duty and penalty waived if complied with, setting a follow-up date for compliance.

This judgment emphasizes the importance of due diligence in verifying the genuineness of suppliers to avail Cenvat credit. It highlights the obligation on the credit availor to ensure proper payment of excise duty on goods. The acknowledgment of inadmissible credit by the company director strengthens the case against waiving the pre-deposit condition. The tribunal's decision to require a partial deposit reflects a balanced approach, considering the lack of efforts to establish supplier identity and financial hardship. Compliance with the deposit directive will lead to the waiver of the remaining duty and penalty amounts, underscoring the significance of meeting regulatory requirements in tax matters.