2022 (10) TMI 876 - AT - Central Excise

Clandestine Removal - Availment of fraudulent Cenvat Credit - non-receipt of inputs - evasion of Central Excise Duty - penalty u/r 26 of Central Excise Rules, 2002 - HELD THAT - As regard the demand of fraudulent Cenvat Credit of Rs. 18 Crores and evasion of Excise Duty for Rs. 94,99,291/- the same stand confirmed as the impugned order is in operation. The appellant being a Director of the Company involved in the entire Modus Operandi of fraudulent availment of credit and evasion of Excise Duty on the clandestine removal of finished goods. Without the knowledge of the director it could not have been possible to make such a huge evasion of duty. Therefore, the involvement of the director is clearly established. It is clear that the appellant was directly involved in evasion of huge amount of excise duty and fraudulent availment of Cenvat Credit. Therefore, there are no infirmity in the finding given by the Adjudicating Authority - the penalty imposed upon the appellant is upheld - appeal dismissed.

Summary

Issues:
- Allegation of fraudulent Cenvat Credit availed by the company
- Allegation of evasion of Central Excise Duty on clandestine removal of goods
- Imposition of penalty on the appellant as the Director of the company
- Appeal against the penalty imposition

Analysis:
1. Fraudulent Cenvat Credit and Evasion of Excise Duty: The case involved allegations against the company for availing fraudulent Cenvat Credit exceeding Rs. 18 Crore without receipt of inputs and evading Central Excise Duty of Rs. 94,99,291 on clandestine removal of goods. The impugned order confirmed these demands, establishing the company's involvement in fraudulent activities.

2. Penalty Imposed on the Appellant: The appellant, as the Director of the company, was alleged to have abetted in the wrongful availment of credit and evasion of Excise duty. The penalty of Rs. 1 crore was imposed on the appellant under Rule 26 of the Central Excise Rules, 2002. The Adjudicating Authority found the appellant to be the mastermind behind the fraudulent activities, actively involved in day-to-day affairs, supervision of activities, and orchestrating a plan to defraud the Central exchequer. The appellant's direct involvement in the evasion of excise duty and fraudulent Cenvat Credit availment was clearly established.

3. Appellant's Appeal: The appellant challenged the imposition of the penalty. Despite multiple listings where the appellant neither appeared nor took adjournment, the appeal was taken up for disposal. The Authorized Representative for the Revenue reiterated the findings of the impugned order and referred to relevant judgments supporting the case.

4. Judgment and Dismissal of Appeal: After careful consideration of submissions and records, the Tribunal upheld the penalty imposed on the appellant. The Tribunal found no infirmity in the Adjudicating Authority's findings, emphasizing the appellant's direct involvement in the fraudulent activities. Consequently, the penalty imposed on the appellant was upheld, and the appeal was dismissed on 20.10.2022.

This detailed analysis highlights the key aspects of the legal judgment involving fraudulent Cenvat Credit, evasion of Excise Duty, penalty imposition on the appellant as the Director, and the dismissal of the appeal challenging the penalty.