2018 (8) TMI 682 - AT - Central Excise

CENVAT Credit - fake invoices - non supply of material - Held that - In the same investigation in another case of Neosym Industry Ltd. and others by order No. A/86911-86914/16/SMB dated 01.04.2016 wherein M/s Wind Industries was also made a noticee, this tribunal while disposing the appeal remanded the matter to the adjudicating authority - the Ld. Bench has found that the case of the Wind Industries is not yet finalised, and the matter was remanded. Since there is a common investigation in the case of Neosym Industry Ltd. and Others including the Wind Industry as well as the present case, I have no option except to follow the finding of the Ld. Coordinate bench of this Tribunal - appeal allowed by way of remand.

Summary

Issues:
1. Disallowance of wrongly availed CENVAT credit and imposition of penalties upheld by Commissioner (A).
2. Show cause notice for disallowance of CENVAT credit issued to M/s Baroda Extrusion.
3. Penalty proposed on Director of M/s Baroda Extrusion Ltd. and M/s Wind Industries Ltd.
4. Appeal against the order in original confirming the demand and penalties.
5. Alleged non-supply of relied upon documents to M/s Wind Industries during adjudication.

Analysis:

1. The appeals were filed against the order passed by the Commissioner (A) upholding the disallowance of wrongly availed CENVAT credit and imposition of penalties. The case involved M/s Wind Industries issuing invoices for alleged non-supply of material to M/s Baroda Extrusion Ltd., who availed credit on such invoices. The adjudicating authority confirmed the demand and imposed penalties, which was upheld by the Commissioner (A), leading to the present appeals.

2. The counsel for M/s Baroda Extrusion Ltd. argued that a show cause notice had already been issued to M/s Wind Industries for the same investigation, making the subsequent notice time-barred as per legal precedents. This argument was based on the principle established by the Hon'ble Supreme Court in a relevant case. The contention was aimed at challenging the sustainability of the demand in the present case.

3. On behalf of M/s Wind Industries, it was highlighted that the relied upon documents were not provided during the adjudication process, leading to a violation of the principle of natural justice. Reference was made to a previous case involving M/s Wind Industries, where the tribunal had remanded the matter back to the adjudicating authority due to similar issues. This lack of document disclosure was presented as a crucial factor affecting the validity of the orders passed by the lower authorities.

4. The Revenue representative reiterated the findings of the impugned order, emphasizing the disallowance of CENVAT credit based on the alleged wrong credit taken by M/s Wind Industries. The argument centered on the illegal nature of passing wrong credit and its implications on the entitlement of CENVAT credit for M/s Baroda Extrusion Ltd.

5. The Member (Judicial) carefully considered the submissions from both sides and reviewed the records. It was noted that the issue revolved around the alleged wrong availment of credit by M/s Baroda Extrusion Ltd. based on invoices from M/s Wind Industries. Referring to a previous tribunal decision related to the activities of M/s Wind Industries, the Member highlighted the need to finalize the earlier issue before addressing the current one. Following the precedent set by the coordinate bench, the matter was remanded to the adjudicating authority for a fair decision after providing all relied upon documents and granting sufficient opportunity for representation.

In conclusion, the appeal was disposed of through remand, with all issues kept open for further consideration based on the provided documents and fair representation opportunities for the appellants.