2017 (4) TMI 688 - AT - Central Excise

CENVAT credit - duty paying invoices - demand of ₹ 30,060/- on the ground that original invoices have been misplaced - Held that - the Commissioner (Appeals) s direction to disallow the credit for which only photo copies are available and there are no original invoices cannot be faulted. If photo copies as an alternative are accepted for allowing cenvat credit, it enhances the chances of fraud and mis-use of facility - credit rightly denied. Demand of ₹ 1,19,844/- on the ground that the activities in Delhi office related to business - Held that - During the material period, the Delhi office was not registered as input service distributer and it has rightly been observed by Commissioner (Appeals) that the proper procedure for availment of the credit of such invoices was for the Delhi office to have got themselves registered as input service distributer - credit rightly denied. Penalty in respect of seized goods - Held that - The Commissioner (Appeals) has rightly upheld imposition of penalty only after 27.02.2010 when the law was amended to impose penalty for wrong availment of credit of Service Tax by suppression of facts with an intent to evade Central Excise duty. Hence there is no infirmity in the order of Commissioner (Appeals). Extended period of limitation - penalty - Held that - there was clearly suppression with an intent to service tax. Hence penalty as well as extended period have been rightly applied. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
Cenvat credit disallowance, Penalty imposition, Seizure of unaccounted goods, Verification of invoices, Appeal against Commissioner (Appeals) order.

Cenvat Credit Disallowance:
The case involved the denial of cenvat credit on service tax invoices not in the name of the appellant. The Commissioner (Appeals) directed the appellants to approach the jurisdictional AC/DC with all invoices to show credit admissibility. The verification report revealed that only specific credits were allowable, leading to a portion being disallowed. The appellant contested the denial, citing reasons for certain credits and maintaining that they were maintaining their Delhi office as a branch office. However, the Tribunal found that the denial of credit for missing original invoices and invoices not in the name of the appellant was justified to prevent misuse and fraud.

Penalty Imposition:
Regarding penalty imposition, the Tribunal considered the appellant's argument that no mala fide intent was involved in availing the credit. However, it was noted that the appellants failed to disclose taking credit on invoices not in their name until after the show cause notice was issued. The Tribunal upheld the penalty and extended period, emphasizing the need for proper record-keeping and compliance with rules. Citing a relevant High Court judgment, the Tribunal justified the extended period and penalty imposition due to willful suppression of material facts.

Seizure of Unaccounted Goods:
The case also involved the seizure of unaccounted V belts/fan belts. The authorized signatory admitted that these goods were not recorded, and the appellants failed to provide evidence that the goods were not manufactured products or recorded as scrap. The Tribunal upheld the imposition of penalties post-amendment in the law, which allowed penalties for wrong credit availed with an intent to evade Central Excise duty.

Verification of Invoices:
The Commissioner (Appeals) directed verification of invoices, leading to specific amounts being found allowable and not allowable. The Tribunal reviewed the findings and upheld the Commissioner's decision, emphasizing the need for proper registration and compliance with input service distribution procedures.

Appeal Against Commissioner (Appeals) Order:
The appellant filed an appeal against the Commissioner (Appeals) order and the subsequent verification report. The Tribunal heard arguments from both parties and reviewed the records. Ultimately, the Tribunal found no infirmity in the Commissioner (Appeals) order and upheld the decision, dismissing the appeal.

This detailed analysis covers the issues of cenvat credit disallowance, penalty imposition, seizure of unaccounted goods, verification of invoices, and the appeal against the Commissioner (Appeals) order, providing a comprehensive overview of the legal judgment.