2013 (4) TMI 563 - AT - Central Excise

Cenvat Credit non receipt of goods - stya Transportation of imported goods - Held that - findings are to the effect that the goods imported at Mumbai was diverted to Tughlakabad and disposed of there and documents were prepared to show as if the materials have been received in the Hyderabad factory. The evidences of the CHAs confirm such diversion. CENVAT credit merely based on documents without actually receiving the goods and the transporters also have disowned transporting goods to the Hyderabad factory and that they prepared consignment notes at the instance of one part amount directed to be deposited.

Summary

Issues: Stay petitions for waiver of pre-deposit of duty, interest, and penalty in multiple appeals; Violation of principles of natural justice; Burden of proof on the appellant-assessee; Involvement of various individuals in preparation of false documents; Disposal of stay applications and required deposit amounts.

Analysis:
1. Stay Petitions for Waiver of Pre-Deposit: The appellants, including M/s. Cubex Tubings Ltd. and individuals like Shri Surendra Prakash Bhandari, sought waiver of pre-deposit of substantial amounts in multiple appeals. The Tribunal considered evidence from both sides, including testimonies from CHAs, transporters, and employees, indicating irregularities in importing goods and taking credit without actual receipt. The Tribunal found the evidence against the appellants and ordered specific deposit amounts for each party involved in the appeals.

2. Violation of Principles of Natural Justice: The appellants contested the orders mainly on the grounds of violation of principles of natural justice. They argued that cross-examination was not allowed adequately, leading to conclusions based on presumptions. However, the Tribunal noted the evidence presented, including statements from CHAs, transporters, and employees, supporting the findings of irregularities in receiving goods and taking credit without proper verification.

3. Burden of Proof on Appellant-Assessee: The Additional Commissioner emphasized that the burden of proof lies on the appellant who has taken credit to demonstrate the receipt and utilization of inputs for the intended purpose. The Commissioner's findings of irregular credit based on unreliable documents and questionable transport details were considered justified by the Tribunal, leading to the imposition of penalties on the appellants.

4. Involvement of Various Individuals in False Document Preparation: The Tribunal observed that the involvement of individuals like Shri Surendra Prakash Bhandari, Shri P.R. Bhandari, Shri Virendra Bhandari, Shri U.M. Bhandari, Satish Agarwal, and Shri Manish Raichand Mardia in preparing false documents to facilitate credit without actual receipt of goods was prima facie established. This further supported the Tribunal's decision on the stay applications and required deposit amounts for each party involved.

5. Disposal of Stay Applications and Required Deposit Amounts: After considering the submissions and evidence from both sides, the Tribunal disposed of the stay applications by ordering specific deposit amounts for each appellant involved in the appeals. The deposit amounts varied for different parties, with a deadline set for compliance. The Tribunal granted a waiver of the balance of dues as per the impugned orders against each appellant upon the required deposit and stayed the recovery pending the disposal of the appeals. It was also clarified that the appeal of defaulting appellants would be dismissed without further notice.

This detailed analysis highlights the key issues addressed in the judgment and the Tribunal's decisions based on the evidence and arguments presented during the proceedings.