2009 (6) TMI 1006 - AT - Central Excise

Summary

Issues involved: Liability admission before Settlement Commission, imposition of penalty, supply of invoices without supplying goods, fake claim leading to Cenvat credit, waiver of pre-deposit, stay application dismissal.

The judgment by Appellate Tribunal CESTAT NEW DELHI involved the case where the principal noticees admitted liability before the Settlement Commission, resulting in the imposition of a penalty of Rs. 11,57,062. The appellants were found to be involved in the offence of supplying invoices without supplying goods, leading to a mere paper transaction. The fraudulent act allowed the beneficiary to enjoy Cenvat credit, and the appellants were penalized for perpetuating the offence through paper transactions. The Tribunal, after considering the facts, dismissed the stay application of the appellant, citing a prima facie case against them and following the precedent set in the case of Benera Valves Ltd. Vs. CCE. The appellants were directed to make a pre-deposit of the entire demand within four weeks from the judgment date to protect the interest of Revenue.

In the judgment, the Tribunal noted that the appellants, despite not having the necessary machinery, engaged in paper transactions without manufacturing goods, leading to the perpetuation of the offence. The Tribunal found that the evidence presented did not warrant a waiver of pre-deposit, as the Revenue had a prima facie case against the appellants. The decision to dismiss the stay application was based on protecting the interest of Revenue and ensuring compliance with the Settlement Commission's order. The appellants were given a deadline to make the required pre-deposit to proceed with the appeal process.