2012 (11) TMI 963 - AT - Central Excise

Cenvat Crdit on bogus Invoice - alleged that appellant forged documents for availing cenvat credit high value inputs i.e. Aluminium Held that - No goods were transported and on their request, supplier had only provided some blank GRs with registration number of some trucks owned by them - As regards the invoices issued by M/s. Aspen Online, a company controlled by Shri Rajesh Mahajan and his wife, on the basis of which cenvat credit of about Rs. 11 Lakhs has been taken by M/s. Alliance Alloys, inquiry with the owners of the trucks, whose registration number are mentioned on the invoices, revealed that those trucks had not been used for transportation All these grades of Aluminium could be manufactured directly from Aluminium scrap of the appropriate ISRI code without use of high value of Aluminium products like CR sheets/coils, rods, etc. - appellant has wrongly availed cenvat credit by forging and fabricating the documents application for waiver of the duty demand, interest and penalty dismissed

Summary

Issues Involved:

1. Alleged wrongful availing of Cenvat credit by M/s. Alliance Alloys Pvt. Ltd.
2. Imposition of penalties on M/s. Alliance Alloys Pvt. Ltd. and associated individuals/entities.
3. Validity of evidence and findings by the Adjudicating Authority.
4. Request for waiver of duty demand, interest, and penalty by the appellants.

Issue-wise Detailed Analysis:

1. Alleged wrongful availing of Cenvat credit by M/s. Alliance Alloys Pvt. Ltd.:

M/s. Alliance Alloys Pvt. Ltd. was accused of availing Cenvat credit amounting to Rs. 4,46,74,814/- during 2004-2005 and 2005-2006 on the basis of alleged bogus invoices for Aluminium sheets, coils, rods, and ingots. The investigation revealed that these materials were never used in the manufacture of Aluminium alloy ingots, and the Cenvat credit was taken without actually receiving these items. The allegations were supported by evidence collected during searches of the factory premises, dealers, and transporters, as well as inquiries with the Directors and employees of M/s. Alliance and associated entities.

2. Imposition of penalties on M/s. Alliance Alloys Pvt. Ltd. and associated individuals/entities:

The Commissioner, Central Excise, Delhi-IV, confirmed the Cenvat credit demand of Rs. 4,46,74,814/- against M/s. Alliance Alloys Pvt. Ltd. along with interest and appropriated an amount of Rs. 9,45,338/- already paid. Additionally, a penalty of Rs. 4,46,74,814/- was imposed on M/s. Alliance Alloys under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11 AC of the Central Excise Act, 1944. Penalties under Rule 26 of the Central Excise Rules, 2002 were also imposed on various noticees, including Shri Rajesh Mahajan, Shri Ashwani Mahajan, M/s. Avon Tube Tech Pvt. Ltd., M/s. Padia Industries, M/s. Aspen Online Pvt. Ltd., and the transporters.

3. Validity of evidence and findings by the Adjudicating Authority:

The Adjudicating Authority's findings were based on a detailed analysis of the evidence. It was observed that during a surprise visit by Central Excise Officers on 20.02.2006, no stock of the claimed high-value raw materials was found in the factory premises. Statements from key individuals, including Shri Rajesh Mahajan and transporters, corroborated the allegations of bogus invoices and fabricated records. The discrepancies in vehicle registration numbers, tare weights, and transit times further supported the conclusion that the inputs were not genuinely received or used in the manufacturing process.

4. Request for waiver of duty demand, interest, and penalty by the appellants:

The appellants argued that the impugned order was based on unwarranted assumptions and ignored evidence. They claimed that Aluminium was an essential input for enhancing the quality of their final product and that the discrepancies in truck numbers and tare weights could be attributed to procedural errors or inadvertent mistakes. However, the Tribunal found that the Adjudicating Authority's conclusions were based on a careful analysis of the evidence, and the appellants failed to make a prima facie case for waiving the pre-condition of duty demand, interest, and penalty.

Conclusion:

The Tribunal concluded that the appellants had wrongly availed Cenvat credit by forging and fabricating documents. Consequently, the stay application was dismissed, and the appellants were directed to deposit the entire duty demand with interest and penalty within eight weeks from the date of the order. The case was listed for arguments on 24.07.2012.