2022 (7) TMI 979 - AT - Central Excise

Levy of penalty imposed under Rule 26 of the Central Excise Rules, 2002 - wrongful availment of CENVAT Credit - Rule 9 of the CENVAT Credit Rules, 2004 - HELD THAT - From a perusal of the Order-in-Original and the impugned Order-in-Appeal, it is not clear as to the stand of the appellant other than a common statement of all the noticees that the credit was availed based on the invoices issued under Rule 11 ibid. and that the said invoices contained all required particulars in terms of Rule 9 of the CENVAT Credit Rules, 2004 and that the duty amount mentioned in the said invoices were paid to M/s. Santhi Steels, Coimbatore. When they were asked to explain / corroborate the discrepancies pointed out in the Show Cause Notice, the noticees took a stand that the evidences procured by the Revenue were vague and that no tangible or cogent evidences were adduced. A perusal of the Show Cause Notice reveals the quantification of the wrongfully availed CENVAT Credit of Rs.4,96,719/- during the years 2006-07, 2007-08 and 2008-09. When the Revenue entertained a genuine doubt as to the wrongful availment of CENVAT Credit after verifying documents like invoices, Daily Sheets, etc., and since there were discrepancies, a Show Cause Notice was issued. When a statutory notice was issued, it was incumbent upon the appellant to at least offer an explanation to clear the doubts pointed out. The appellant, however, without bothering to do so, has only contended that the documents / evidences relied upon by the Revenue were vague, etc., despite the fact that the Revenue had also relied on his statement recorded, which is not rebutted - the fact remains that M/s. Hitech Mineral Industries (Covai) Pvt. Ltd. had wrongfully availed CENVAT Credit and the appellant being any person who has abetted in making such documents that helped M/s. Hitech Mineral Industries (Covai) Pvt. Ltd. in availing such wrongful CENVAT Credit, cannot escape from the rigours of Rule 26 of the Central Excise Rules, 2002. There are no whisper about any retraction or any disputes as to their statements being not voluntary. The same are not even rebutted as having been obtained per force. Hence, the statements are relevant documents. The present appeal was filed in the year 2013 and the appellant had sufficient time to place all such relevant documents on record, but no such attempt is made. Appeal dismissed.

Summary

Issues involved:
Whether the penalty imposed under Rule 26 of the Central Excise Rules, 2002 was correctly upheld in the impugned order?

Analysis:
The appeal challenged the Order-in-Appeal upholding a penalty imposed by the Commissioner of Customs and Central Excise. The key issue was to determine the correctness of the sustained penalty. The appellant was represented by a consultant, and the Revenue was represented by an authorized representative. The Tribunal heard both sides and examined the documents on record. It was noted that while the Advocate represented multiple parties, a separate order was passed for a party due to non-prosecution.

The relevant facts included a Show Cause Notice issued to multiple co-noticees regarding the wrongful availment of CENVAT Credit. The investigation revealed discrepancies in documents and statements, indicating potential irregularities in claiming credit. The Revenue's case highlighted various invoices, delivery notes, and discrepancies in goods received, leading to suspicions of wrongful credit availed by the appellant.

The appellant's defense primarily rested on the sufficiency of the invoices and the contention that the Revenue's evidence was vague. However, the Tribunal found the appellant's response inadequate in addressing the doubts raised by the Revenue. Despite the opportunity to provide explanations and relevant documents, the appellant failed to substantiate their claims or refute the discrepancies pointed out in the Show Cause Notice.

The Tribunal emphasized that when doubts were raised by the Revenue through a statutory notice, it was the appellant's responsibility to address and clarify those doubts. The lack of supporting material or substantial rebuttals led to the confirmation of the demand and penalties against the noticees. The Tribunal found no grounds to interfere with the Order-in-Original, which was upheld in the impugned order, resulting in the dismissal of the appeal.

In conclusion, the Tribunal upheld the penalty imposed under Rule 26 of the Central Excise Rules, 2002, as it found the appellant failed to adequately address the suspicions and discrepancies raised by the Revenue, leading to the wrongful availment of CENVAT Credit. The appeal was dismissed, affirming the decision of the Commissioner of Customs and Central Excise (Appeals).