2013 (5) TMI 803 - AT - Central Excise

Waiver of pre deposit - Mis-declaration and fabrication of documents - Held that - appellant had made supply of the goods through cenvatable invoices to the extent of 11% to 58% and the peak thereof was nearly 30% in respect of fabricated documents. When the peak supply in average is 30%, the appellant in both stay applications should be directed to make pre-deposit as contributory to the loss of revenue because the appellant manufacturer had used the false and fabricated cenvatable invoices issued by the appellant. - Decided against assessee.

Summary

Issues involved:
1. Mis-declaration and fabrication of documents for availing cenvat credit.
2. Use of false and fabricated cenvatable invoices.
3. Penalty imposed on the appellant.
4. Direction to deposit a specific amount against each stay application.

Analysis:

1. The judgment addresses the issue of mis-declaration and fabrication of documents by the manufacturer and the appellant-input suppliers to avail cenvat credit. The Tribunal notes that rejects and scrap, which were not goods supplied, were claimed to be inputs, causing sabotage to Revenue. The appellant made supply of goods through cenvatable invoices, with a peak supply of nearly 30% in respect of fabricated documents. The Tribunal directs the appellant to make a pre-deposit as contributory to the loss of revenue due to the false invoices used by the manufacturer.

2. Another issue discussed is the use of false and fabricated cenvatable invoices by the appellant. The Tribunal emphasizes that the appellant should be held accountable for contributing to the loss of revenue by supplying goods through such invoices. As a result, the Tribunal directs the appellant to deposit a specific amount against each stay application within a stipulated timeframe to ensure compliance and address the financial impact of the fabricated invoices on the Revenue.

3. The judgment also touches upon the penalty imposed on the appellant. Due to the absence of Shri Kackria during the hearing, the Tribunal refrained from passing any order against the penalty imposed on the two applications. However, considering the gravity of the situation involving mis-declaration and fabrication of documents, the Tribunal directs the appellant to make a substantial deposit to mitigate the revenue loss caused by their actions.

4. Lastly, the Tribunal issues a specific direction for the appellant to deposit Rs. 10,00,000 against each stay application within six weeks from the date of the judgment to ensure compliance by a specified deadline. This directive aims to address the financial implications of the appellant's actions and contribute to offsetting the revenue loss attributed to the misuse of cenvatable invoices.

Overall, the judgment underscores the importance of compliance with legal requirements, highlights the consequences of misrepresentation in documentation for availing credits, and emphasizes the need for accountability in mitigating revenue losses caused by fraudulent practices in the supply chain.