2018 (11) TMI 347 - AT - Central Excise

CENVAT Credit - fake invoices - no receipt of goods - reliance placed on the statement of Shri. P. Sivarama Krishnan, Proprietor of the appellant - Held that - Most of the questions were not required since, after giving the first statement on 14.09.2012, the appellant had not made any attempts to ascertain if there were any doubts and offer clarification. Further, it is not forthcoming as to what prompted this present officer to record the second statement on 19.02.2015; there is no explanation offered anywhere or even by the appellant who got itself subjected to re-examination. The whole scenario appears to be a set up, that too, after a long gap of nearly 29 months, which was not required. There is no merit in the argument of appellant that the Revenue has not relied on the statement of M/s. PE in its Show Cause Notice since, in the statement dated 14.09.2012 the appellant has acknowledged having gone through the statement of M/s. PE, wherein he has also accepted the statement as true‛ by which further probe of the Revenue was blocked. Appeal dismissed - decided against appellant.

Summary

Issues:
- Liability of penalty under Rule 26(2) of the Central Excise Rules, 2002.

Analysis:
1. Background: The case involved a Show Cause Notice issued to the appellant based on officers' visit to a factory premises where it was found that the appellant availed CENVAT Credit without actual receipt of goods, leading to a penalty under Rule 26(2) of the Central Excise Rules, 2002.

2. Order-in-Original: The Order-in-Original confirmed the penalty, which was later upheld by the Commissioner of G.S.T. & Central Excise (Appeals-I), Chennai. The appellant then appealed to the forum.

3. Contentions: During the hearing, the main issue was whether there was a liability of penalty under Rule 26(2) of the Central Excise Rules, 2002.

4. Statement of Retraction: The appellant heavily relied on a statement of retraction dated 19.02.2015, recorded before the Superintendent of Central Excise, to contest the penalty. However, the statement from 2012 where the appellant admitted to the transactions with the concerned party was considered crucial.

5. Analysis of Retraction: The Tribunal scrutinized the statement of retraction and found it suspicious due to the long gap between the two statements, lack of explanation for the re-recording, and dilution of the investigation effort. The appellant's argument regarding bank statements and payment receipts was also dismissed.

6. Endorsement of Commissioner's Findings: The Tribunal endorsed the Commissioner's findings regarding the statement of retraction, emphasizing the lack of explanation for the delayed retraction.

7. Reliance on Statements: The Tribunal rejected the argument that the Revenue did not rely on the statement of the concerned party, as the appellant had acknowledged and accepted the statement in the initial investigation, hindering further probe by the Revenue.

8. Decision: Ultimately, the Tribunal found no merit in the appellant's arguments and upheld the Commissioner's decision, dismissing the appeal against the penalty under Rule 26(2) of the Central Excise Rules, 2002.

This detailed analysis of the judgment highlights the key legal aspects, arguments presented, and the Tribunal's reasoning behind upholding the penalty in the case.