2014 (1) TMI 630 - AT - Central Excise

Fake invoices issued No movement of Steel ingots made Ingots to the second stage dealer Waiver of Pre-deposit Held that - Goods were actually not received since the original dealer has admitted that transactions were not only on paper and there could not have been any movement of the goods the appellant have not been able to made Prima facie case in their favour the appellant directed to deposit Rs.24,000 as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues: Allegation of issuing fake invoices without actual movement of goods, failure to prove receipt of goods by the appellant, comparison with a similar case where charges were dropped, consideration of Commissioner (Appeals) findings on paper transactions, determination of pre-deposit amount.

Allegation of issuing fake invoices without actual movement of goods:
The Department alleged that M/s. Sidh Balak Enterprises issued fake invoices without actually moving Steel Ingots to the second stage dealer, M/s. Choudhary Steel Trader. M/s. Sidh Balak Enterprises admitted to not having a godown and running three trading firms for only three months, changing offices frequently. The Appellant argued that they did receive the material, challenging the Department's failure to conclusively prove non-receipt of goods and the absence of transporter statements. Reference was made to a previous case where charges were dropped against a similar party, M/s. Talson Mill Stores.

Failure to prove receipt of goods by the appellant:
The Commissioner (Appeals) extensively discussed the allegation of transactions only on paper, with the first stage dealer admitting to lacking a warehouse and engaging in paper transactions without actual movement of goods. The Appellant contended that the second stage dealer, M/s. Choudhary Steel Trader, received the goods and had no reason to doubt the invoices' authenticity. However, it was found that the goods were not actually received, as confirmed by the original dealer's admission of paper transactions without movement of goods.

Comparison with a similar case where charges were dropped:
The Appellant drew a parallel with a case involving M/s. Talson Mill Stores, where charges were dropped under similar circumstances. However, the Tribunal found no merit in this comparison, emphasizing the lack of actual receipt of goods in the present case despite assertions by the second stage dealer.

Consideration of Commissioner (Appeals) findings on paper transactions:
The Tribunal considered the detailed findings of the Commissioner (Appeals) regarding paper transactions and the admission by the first stage dealer about the absence of a warehouse and the existence of transactions solely on paper. This information played a crucial role in determining the lack of actual movement of goods and the issuance of fake invoices.

Determination of pre-deposit amount:
After reviewing the facts, submissions, and previous orders, the Tribunal concluded that the Appellant failed to establish a case for a complete waiver of the pre-deposit. Consequently, an order was issued for the Appellant to deposit Rs. 24,000 within four weeks, with the remaining penalty amount stayed pending the appeal's disposal. Compliance was set for a specific date following the pronouncement of the order in the open court.