2017 (1) TMI 1312 - AT - Central Excise

Evidence substantiating evasion of duty - parallel invoices issued to make transactions - disguised clearance made claiming the goods to be hank yarn and duty free - Held that - Maintenance of record by the appellant was found to be fabricated and false and appellant caused loss of revenue for which it faced adjudication - There were no evidence led before us today to discard the appellate authority s findings as to the falsification of record and issuance of fabricated invoices - there is no evidence to repel the evidence given by the buyers - appeal dismissed.

Summary

Issues: Allegation of evasion and penalty on the main appellant, Evidence of evasion through parallel invoices and disguised clearance, Adjudication based on investigation findings, Modus operandi of evasion by the main appellant, Failure to defend against duty loss calculation, Use of false invoices for duty exemption, Involvement of fictitious parties in replacing invoices, Fabricated records and loss of revenue, Upholding the appellate authority's findings.

The judgment in the case revolved around the allegation of evasion and penalty on the main appellant, M/s. Sree Skanda Spinners. The appellant argued that there was insufficient evidence directly linking them to the evasion. However, the Revenue contended that massive evasion occurred through the issuance of parallel invoices and disguised clearances. The investigation revealed that cotton cone yarns were cleared as hank yarn to claim duty exemption, supported by the recovery of incriminating material during the search. The adjudicating authority and the Commissioner (Appeals) found adequate evidence to support the duty demand and penalty imposed.

The modus operandi employed by M/s. Sree Skanda Spinners involved clearing cotton cone yarn without conversion to hank yarn, using one set of invoices to indicate dutiable goods and another set to falsely claim duty exemption. The investigation uncovered that no actual processing was done by M/s. Rockwell Textiles, as claimed in the invoices. The appellant failed to rebut the duty loss calculation presented by the Revenue, further strengthening the case against them for maintaining false records and causing revenue loss.

The Revenue's case highlighted the fabrication of records and the use of fictitious parties to replace invoices, enabling the evasion scheme. The appellate authority's findings regarding the falsification of records and issuance of fabricated invoices were upheld due to the lack of evidence presented to challenge them. Consequently, the appeals were dismissed, affirming the order passed by the Commissioner (Appeals) based on the established circumstances and evidence presented during the proceedings.