2015 (12) TMI 1052 - AT - Central Excise

Denial of CENVAT Credit - whether there is sufficient evidence against the appellant to establish the charge of aiding and abetting M/s. Real Terminal Engineering Works (India) Pvt. Ltd. to avail and utilize inadmissible cenvat credit - Held that - Though the appellant states that Shri Jaswantlal Shah has helped M/s. Real Terminal Engineering Works (India) Pvt. Ltd. in availing inadmissible cenvat credit, but he has done so in his individual capacity and has nothing to do with the appellant. This submission is devoid of merit keeping in view the evidence on record. Both the authorities below have held that Shri Jaswantlal Shah has played key role in helping M/s. Real Terminal Engineering Works (India) Pvt. Ltd. to avail inadmissible cenvat credit in contravention of the Cenvat Credit Rules, 2002. It is pertinent to note that the appellant is a proprietorship concern and it is unlikely that the activities of Shri Jaswantlal Shah is not in the knowledge of the appellant. Therefore, keeping in view all the facts and circumstances and the evidence on record, I do not find any infirmity in the impugned order. However, I feel that the imposition of penalty of ₹ 1,25,000/- is on a higher side and, therefore, I reduce it to ₹ 50,000 - Decided partly in favour of appellant.

Summary

Issues:
- Appeal against order-in-appeal upholding penalty under Rule 26 of the Central Excise Rules, 2002.
- Allegations of aiding and abetting inadmissible cenvat credit.
- Role of appellant in the transactions.
- Evidence against the appellant.
- Imposition of penalty.

Analysis:
The appellant challenged the order-in-appeal upholding a penalty imposed under Rule 26 of the Central Excise Rules, 2002. The case involved allegations that the appellant aided and abetted another company in availing inadmissible cenvat credit. The appellant, engaged in manufacturing copper products on job work basis, received a show cause notice regarding the involvement in facilitating the fraudulent credit availment. The appellant denied any involvement in the scheme and argued against the penalty imposition. The adjudicating authority confirmed the demand and penalty, leading to an appeal before the Commissioner (Appeals) who upheld the decision. The appellant contended that they had no role in assisting the other company in availing the credit.

The appellant's counsel presented evidence to support their claim of innocence, referencing statements from individuals involved in the transactions. They argued that the appellant merely issued invoices for job work charges and had no part in the fraudulent activities. The appellant's counsel highlighted that the appellant's proprietor's statement was not recorded during the investigation, emphasizing the lack of direct evidence against the appellant. On the contrary, the Assistant Commissioner supported the findings of the Commissioner (Appeals), maintaining the liability of the appellant.

Upon reviewing the case, the Tribunal analyzed the evidence and arguments presented. The Tribunal noted that while the appellant claimed innocence, the evidence indicated the involvement of an employee of the appellant in facilitating the fraudulent credit scheme. Considering the nature of the proprietorship concern, the Tribunal inferred that the appellant was likely aware of the employee's activities. Consequently, the Tribunal upheld the decision but deemed the penalty amount excessive, reducing it from &8377; 1,25,000 to &8377; 50,000. The Tribunal partially allowed the appeal by modifying the penalty amount, concluding the case on 4.12.2015.