2022 (7) TMI 980 - 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:
1. Appeal against penalty imposed under Rule 26 of Central Excise Rules, 2002.
2. Deciding whether the penalty sustained in the impugned order is correct.

Analysis:
The appeal in question was filed challenging the penalty imposed under Rule 26 of the Central Excise Rules, 2002. The main issue to be determined was the correctness of the penalty upheld in the impugned order. The appellant argued through their Consultant, focusing on specific appellants and individuals involved in the case. Notably, a separate order was passed due to non-prosecution by one of the appellants. The relevant facts revolved around a Show Cause Notice issued to multiple co-noticees, suspecting wrongful availment of CENVAT Credit and collaboration in preparing invalid documents. The investigation highlighted discrepancies in documents, such as delivery notes and invoices, indicating possible irregularities in the availed credit.

The Revenue's case emphasized various aspects, including the origin of materials, duty payments, transportation details, and discrepancies in documents. The appellant's defense primarily rested on the adequacy of invoices and the contention that the evidence procured by the Revenue was vague. Despite the quantification of wrongfully availed credit and the confirmation of demand and penalties by the Adjudicating Authority, the appellant failed to provide substantial evidence or explanations to counter the allegations. The First Appellate Authority dismissed the appeal due to unsatisfactory arguments, leading to the current appeal before the Tribunal.

The Tribunal noted the appellant's failure to address the doubts raised by the Revenue and the lack of supporting material to substantiate their claims. The appellant's argument that the Revenue's evidence was vague did not hold weight, especially considering the reliance on recorded statements and other documents. The Tribunal highlighted the appellant's failure to present relevant documents or challenge the discrepancies effectively. Ultimately, the Tribunal upheld the Order-in-Original and the impugned Order-in-Appeal, concluding that there were no grounds to interfere with the penalty imposed. The appeal was consequently dismissed, affirming the penalty upheld in the impugned order.

In conclusion, the judgment focused on the appellant's inadequate response to the allegations, failure to provide substantial evidence, and lack of effective rebuttal against the Revenue's findings. The Tribunal emphasized the importance of addressing doubts raised during investigations and presenting relevant documents to support the defense. The decision to dismiss the appeal was based on the appellant's inability to counter the allegations effectively, leading to the affirmation of the penalty imposed under Rule 26 of the Central Excise Rules, 2002.