2017 (1) TMI 30 - AT - Central Excise

CENVAT credit - forged invoices - natural justice - Held that - all the invoices issued by are fake and without receipt and supply of the material - fraudulent Cenvat credit have been passed - demand of credit, with interest and penalty sustains. Natural justice - Held that - all the invoices are fake and without receipt and supply of goods then the plea of the Ld. Counsel of non observance of principles of nature justice has no meaning and will not be of any help of the appellant. Appeal dismissed - decided against appellant.

Summary

Issues: Appeal against rejection of appeals by Commissioner(Appeals) regarding fraudulent Cenvat credit availed by the appellants based on fake invoices issued by certain dealers.

Analysis:
1. Background: The appeals were directed against the Order-in-Appeal passed by the Commissioner(Appeals) rejecting the appeals of the appellants and upholding the Order-in-Original in toto. The appellants were engaged in the manufacture of M.S. Ingots under Chapter Heading No. 72 of the Central Excise Tariff Act, 1985.

2. Evidences Presented: The case was built on various evidences, including reliance on investigations by the Mumbai-III Commissionerate, letters from Sales Tax Authorities, and findings related to the issuance of fraudulent invoices without physical movement of goods. The investigation revealed discrepancies in invoices, lack of physical movement of goods, and the issuance of parallel invoices with the same serial numbers.

3. Adjudication and Penalties: The department issued a show cause notice leading to an Order-in-Original for recovery of Cenvat credit, interest, and penalties. Personal penalties were imposed on the directors of the involved companies. The Order-in-Original was challenged through appeals before the Commissioner(Appeals) by the appellants.

4. Arguments: The appellants argued that the principles of natural justice were violated as they were not allowed to cross-examine witnesses or access certain evidentiary documents during adjudication.

5. Decision: The Member(Judicial) analyzed the case, comparing it to similar cases previously decided by the Tribunal. It was found that the modus operandi of the appellants and the dealers involved was similar to other cases where demands were confirmed. The Tribunal concluded that the invoices were fake, leading to the fraudulent availing of Cenvat credit. The plea regarding the violation of natural justice was dismissed based on the established facts from previous cases.

6. Conclusion: The Tribunal upheld the impugned order, dismissing the appeals of the appellants. The decision was based on the established fraudulent activities related to the issuance of fake invoices and the availing of Cenvat credit without actual receipt or supply of goods. The judgment was pronounced in court on a specific date.

This detailed analysis of the judgment highlights the key issues, evidences, adjudication process, arguments presented, and the final decision made by the Member(Judicial) of the Appellate Tribunal CESTAT Mumbai.