2012 (9) TMI 859 - AT - Central Excise

CENVAT Credit - appellant is procuring and selling ingots in the market without passing on the Cenvat credit of duty to its customers - Held that - there is no evidence indicating that the manufacturer had cleared the goods at the instance of the appellant. The appellant is only a buyer of ingots and had admittedly issued ST-31. The statements of driver and the owner in respect of past transactions are evidences in the nature of co-accused s statement and cannot be given precedence over the appellant s own statement. As such in the absence of any evidence and in view of the fact of issuance of ST Form, I am of the view that the Revenue has failed to make out a case so as to impose penalty upon the present appellant. In view of the foregoing, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Whether the appellant is liable for penalty for not passing on Cenvat credit of duty to customers.
2. Whether the appellant was involved in clandestine clearance of goods.
3. Whether the appellant's actions warranted penalties imposed by the revenue authorities.

Analysis:

1. The appellant, a dealer of M.S. Ingots, was found to be procuring and selling ingots without passing on the Cenvat credit of duty to customers. The original adjudicating authority imposed penalties on various persons, including the appellant, for this non-compliance.

2. The appellant contended that although they had placed an order with another dealer for the ingots and supplied the necessary sales tax form, there was no evidence to prove their involvement in the clandestine clearance of goods by the manufacturer. The appellant argued that merely placing orders should not be considered abetment for such activities.

3. The Revenue authorities presented statements from the driver and owner of the truck indicating past supplies to the appellant, which were not reflected in the appellant's records. The Revenue argued that this discrepancy showed the appellant's involvement in purchasing goods cleared without excise duty payment and not maintaining proper records.

4. The Tribunal, after considering both sides' submissions and reviewing the lower authorities' orders, found no evidence linking the manufacturer's actions to the appellant. The Tribunal noted that the appellant was only a buyer of ingots and had issued the required ST Form, indicating legal transactions. The Tribunal emphasized that the statements of the driver and owner were in the nature of co-accused statements and could not outweigh the appellant's own statement. Therefore, due to the lack of evidence and the issuance of the ST Form, the Tribunal concluded that the Revenue had failed to establish a case for imposing penalties on the appellant. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.