2019 (11) TMI 1461 - AT - Central Excise

Quantum of penalty - fraudulent availment of CENVAT credit and its utilization in claiming rebate of duty - Bogus firm - applicability of Rule 13(1) of Central Excise Rules 2002 - HELD THAT - While imposing penalty on the Respondent, the learned Commissioner has analyzed the provisions of Section 11AC of Central Excise Act 1944, Rule 13 of CENVAT Credit Rules of 2004 and observed that It is a well settled position that if the show-cause notice brings out the offence fully and clearly the fact that the exact rule under which offence falls is not material and the proceedings survive. So I find it proper to impose penalty on ATI under Rule 13(1) of Central Excise Rules 2002 instead of 13(2) mentioned in the show-cause notice. There are no reason to interfere with the said finding recorded by the learned Commissioner - appeal dismissed - decided against Revenue.

Summary

Issues:
- Challenge to penalty imposed by adjudicating authority
- Allegations of fraudulent CENVAT credit and rebate claims
- Imposition of penalties on various entities
- Interpretation of relevant provisions of CENVAT Credit Rules and Central Excise Act

Analysis:
The judgment involves an appeal by the Revenue against an Order-in-Original passed by the Commissioner, Central Excise, Mumbai-1. The Commissioner found that ATI had maintained fraudulent accounts for CENVAT credit, disallowed credit taken, and rejected rebate claims by M/s Ashapura Textiles. Penalties were imposed on ATI and various entities under different rules. The Revenue challenged the penalty, arguing that it was inadequate. The Revenue contended that penalties should have been imposed under specific provisions of the CENVAT Credit Rules and Central Excise Act. The Commissioner had found M/s Ashapura Textile Industries to be a bogus unit created for fraudulent activities related to CENVAT credit and rebate claims. The Commissioner analyzed the evidence and imposed penalties based on the findings.

The Revenue argued that penalties imposed were not in line with the CENVAT Credit Rules and Central Excise Act. The Commissioner had observed that ATI had wrongly taken CENVAT credit and utilized it for claiming rebate on exported goods. The Commissioner analyzed the provisions of Section 11AC of the Central Excise Act and Rule 13 of the CENVAT Credit Rules. The Commissioner found that penalties under Rule 13(1) of Central Excise Rules 2002 were applicable to ATI. The Commissioner also imposed penalties on other noticees based on specific rules and considerations. The Commissioner's findings were upheld, and the Revenue's appeal was rejected as the penalties were deemed appropriate and in accordance with the law.

In conclusion, the judgment addressed issues related to fraudulent CENVAT credit, rebate claims, and penalties imposed on entities involved in the case. The analysis focused on the legal provisions governing penalties under the CENVAT Credit Rules and Central Excise Act. The decision upheld the penalties imposed by the Commissioner, deeming them appropriate based on the findings and legal considerations outlined in the judgment.