2017 (5) TMI 97 - AT - Central Excise

Natural justice - denial of cross-examination - claim of appellant is that Fraudulent rebate claim made by merchant exporter should not cause prejudice to appellant - Revenue has brought out every detail of subterfuge to it in the show-cause notice. Cause of action arose when investigation revealed that no inputs were received in the factory of appellant. Fake invoices and fake transport documents were used for fabrication of record and avail CENVAT credit fraudulently - Held that - Appellant is directed to file a paper book as well as copies of evidence gathered under Section 14 of the Central Excise Act, 1944 - Learned DR is directed to provide the details of the merchant exporter whose names in show-cause notice have appeared stating whether they are in appeal before Tribunal - appeal disposed off - matter on remand.

Summary

Issues:
1. Denial of cross-examination leading to injustice
2. Fraudulent rebate claim by a merchant exporter causing prejudice
3. Lack of examination of facts and evidence by Revenue

Analysis:
1. The appellant contended that the denial of cross-examination has hindered the quest for justice. It was argued that the fraudulent rebate claim made by the merchant exporter should not prejudice the appellant. The appellant highlighted that the manufacturing of goods took place in their factory upon input receipt, emphasizing that Revenue failed to scrutinize all facts and evidence on record.

2. The record presented by Revenue detailed a subterfuge in the show-cause notice, revealing a lack of input receipt in the appellant's factory. Fake invoices and transport documents were allegedly used to fraudulently avail CENVAT credit. The investigation unearthed incriminating evidence against the appellant, indicating a lack of goods received from any job worker. The show-cause notice outlined the cause of action clearly, pointing out evidence relied upon for its issuance.

3. The investigation exposed a deep-rooted conspiracy involving merchant exporters and a supporting manufacturer to defraud the government. The scheme involved fictitious manufacturing and export activities, leading to substantial revenue loss. The individuals implicated in the conspiracy were found to have collaborated in evading customs duties and fraudulently availing benefits under the Central Excise Act. The judgment directed the appellant to submit a paper book and evidence copies, highlighting the appeal's age and the need for timely compliance. Additionally, directions were issued to provide details on merchant exporters and the status of criminal proceedings, with related appeals being tagged for joint consideration.

This detailed analysis encapsulates the issues raised in the legal judgment, emphasizing the complexities of the case and the implications of fraudulent activities on revenue and justice.