9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 1124 - AT - Central ExciseEOU - Clandestine Removal - evasion of huge excise duty on the clearance of goods clandestinely from the EOUs - fraudulent advance license could not have been issued - malafide intent or not - penalty under Rule 26 of CER - HELD THAT - The appellant have admittedly issued false performance certificate to fraudulent parties who, on the basis of the said certificates obtained the advance license and such advance licenses were used for evasion of huge excise duty on the clearance of goods clandestinely from the EOUs. Without the performance certificate, the fraudulent advance license could not have been issued and huge revenue loss could not have occurred to the government exchequer. Therefore, for the entire offence the appellant s role is key role. The appellant has also not verified any credentials of their so-called clients. It is also a fact on record that the appellant have categorically admitted in his statement that if he would have known that so huge revenue involvement is there, he could have charged heavy amount of fees as compared to Rs.1500 per certificate. With this statement, the mala fide of the appellant is clearly established. This tribunal dealing with the similar fact maintained the penalty imposed on the Chartered Accountant for issue of Solvency/Export performance certificate in the case of MAHESH P. PATEL SUDESH D. NANAWARE VERSUS COMMISSIONER OF CUSTOMS (EP) , MUMBAI AND COMMISSIONER OF CUSTOMS (EP) , MUMBAI VERSUS SPECTRUM FABRICS 2018 (6) TMI 17 - CESTAT MUMBAI where it was held that it can be seen that the appellant Shri Sudesh Nanaware, being a consultant, has admitted the pre-decided plan for committing the fraud. Therefore, he was rightly imposed the penalty under Section 112(a). The appellant has been rightly imposed with a penalty under Rule 26 of Central Excise Rules - there are no infirmity in the impugned order to the extent of penalty of Rs. 5 lacs was imposed upon appellant under Rule 26 - the penalty is upheld - appeal dismissed.
Issues Involved:
1. Issuance of false performance certificates by the appellant. 2. Imposition of penalty under Rule 26 of Central Excise Rules, 2002. 3. Appellant's defense and claims of bona fide belief. 4. Role and involvement of the appellant in the fraudulent scheme. 5. Precedent cases and their relevance to the current case. 6. Revenue's appeal for penalty under Section 114A. Summary: Issuance of False Performance Certificates: The appellant, a Chartered Accountant, issued performance certificates to various parties without verifying their credentials. These certificates were used to obtain advance licenses, which were subsequently misused, leading to evasion of over Rs. 10 Crores in excise duty. The appellant was penalized Rs. 5 lacs under Rule 26 of Central Excise Rules, 2002. Imposition of Penalty under Rule 26: The tribunal found that the appellant's issuance of false certificates played a key role in the fraudulent scheme. The appellant's own admission that he would have charged more if he had known the gravity of the revenue involved indicated mala fide intent. The tribunal upheld the penalty, citing similar judgments where penalties were confirmed for such offenses. Appellant's Defense: The appellant argued that he acted under a bona fide belief and charged nominal fees. He claimed he was unaware of the misuse of the certificates and contended that penalty under Rule 26 could not be imposed without a charge of confiscation of goods. However, the tribunal found these defenses unconvincing, noting the appellant's failure to verify credentials and his admission regarding the fees. Role and Involvement in Fraud: The tribunal emphasized the appellant's significant role in the fraud, noting that without the false certificates, the advance licenses and subsequent revenue loss would not have occurred. The appellant's actions were deemed to have facilitated the evasion of excise duty. Precedent Cases: The tribunal referenced several cases, including SHYAM CHAGANLAL AGARWAL Vs. COMMISSIONER OF CUSTOMS (IMPORTS) and MAHESH P. PATEL Vs. COMMISSIONER OF CUSTOMS (EP), where penalties were upheld for similar offenses. These cases supported the tribunal's decision to impose and uphold the penalty on the appellant. Revenue's Appeal for Penalty under Section 114A: The tribunal noted that the adjudicating authority had not addressed the issue of penalty under Section 114A in the impugned order. Consequently, the tribunal remanded this issue back to the adjudicating authority for consideration. The appeals of the appellant and another involved party were dismissed. Conclusion: The tribunal upheld the penalty of Rs. 5 lacs imposed on the appellant under Rule 26 of Central Excise Rules, 2002, and dismissed the appeal. The issue of penalty under Section 114A was remanded to the adjudicating authority for further consideration.
|
