2010 (6) TMI 746 - AT - Central Excise

Summary

Issues:
1. Validity of rebate claims filed by the appellant.
2. Recovery of rebate claim and imposition of penalties.
3. Appeal against the order of the Commissioner (Appeals).
4. Justification of subsequent demand of duty and limitation on show cause notice.

Analysis:

Issue 1:
The appellant filed two claims for rebate with the Deputy Commissioner of Central Excise for export of dyed/printed fabrics, which were later found to be fraudulent based on fake shipping bills. Investigations revealed that the goods had not reached the foreign country, and the rebate claims were falsely made.

Issue 2:
Proceedings were initiated for the recovery of the rebate claim through a show cause notice, resulting in a demand of Rs. 7 lakhs and imposition of penalties under Section 11AC. The original adjudicating authority also imposed penalties on the proprietor, which was later set aside by the Commissioner (Appeals) who reduced the penalty on the firm considering the deposited amount.

Issue 3:
The appeal was made against the Commissioner (Appeals) order, challenging the penalty reduction. The advocate did not dispute the forged shipping bills but argued against the subsequent demand of duty, citing a Supreme Court case. However, the Tribunal found no merit in the arguments and upheld the decision of the lower authorities.

Issue 4:
The appellant argued that the demand of duty was not justified due to the earlier sanction of rebate claims and the show cause notice being time-barred. The Tribunal rejected these arguments, stating that the extended period for recovery applied due to the forged nature of the shipping bills, citing a recent decision of the High Court of Gujarat.

In conclusion, the Tribunal rejected the appeal, affirming the decision of the lower authorities regarding the recovery of the rebate claim and penalties imposed on the appellant for fraudulent rebate claims based on fake shipping bills.