2018 (7) TMI 412 - AT - Central Excise

Waiver of Penalties - the Commissioner (Appeals) set aside the penalties on the Respondents as there is no material available of the act of abetting on the part of the Respondents - Held that - In the present appeals, it has already been observed that there are materials against the Respondents for involvement in the fake transactions - After considering the facts and circumstances of the case in totality, the quantum of penalties imposed on the Respondents are excessive. The orders of the Adjudicating Authority are restored subject to that the penalties imposed on the Respondents are reduced to ₹ 2,50,000/- each - appeal allowed - decided in favor of Revenue.

Summary

Issues:
1. Confirmation of demand of Central Excise duty and imposition of penalties.
2. Role of the Respondents in fake transactions and abetting CENVAT Credit misuse.
3. Appeal against setting aside penalties by the Commissioner (Appeals).
4. Reduction of penalties imposed on the Respondents.

Analysis:

Issue 1:
The case involved the confirmation of demand for Central Excise duty and penalties imposed on the assessee for irregular CENVAT Credit availed based on fake transactions. The Adjudicating Authority confirmed the demand and penalties, which were later set aside by the Commissioner (Appeals), leading to appeals by the Revenue.

Issue 2:
The Respondents, including the director of the assessee and a broker, were found to be involved in fake transactions. The Respondent No. 2 admitted to receiving directions for fake transactions from the director, with no actual material transacted, indicating their involvement. The Commissioner (Appeals) set aside penalties citing lack of clear evidence of abetting by the Respondents.

Issue 3:
The Revenue appealed against the setting aside of penalties, arguing that the Commissioner (Appeals) failed to consider crucial roles played by the Respondents in issuing fake invoices for CENVAT Credit misuse. The Revenue contended that the involvement of the director and the broker in the fraudulent scheme warranted penalty imposition.

Issue 4:
Upon review, the Tribunal found that the involvement of the Respondents in fake transactions was established, contradicting the findings of the Commissioner (Appeals). While acknowledging the excessive quantum of penalties, the Tribunal set aside the Commissioner's order, restoring the Adjudicating Authority's decision but reducing the penalties imposed on the Respondents.

This detailed analysis of the judgment highlights the key issues, the roles of the parties involved, the arguments presented, and the final decision rendered by the Tribunal, ensuring a comprehensive understanding of the legal proceedings and outcomes.