2023 (6) TMI 992 - AT - Central Excise

CENVAT credit - duty paying documents - bills of entry were assessed on the basis of forged licences - HELD THAT - In the present case the cenvat credit was denied mainly on the allegation that there is a mala fide on the part of the appellant since there was forgery in the licenses under which the bills of entry were filed accordingly the said bills of entry are not valid documents for availing cenvat credit - it is observed that the genesis of this case is the fraudulent obtainment of VKGUY DEPB licences in regard to that custom matter the appellants were issue show cause notice dated 05.11.2012 which was adjudicated vide order-in-original passed by customs commissioner. However, the adjudication order in the customs matter was not considered by the Adjudicating Authority in the present case. This matter needs to be remitted back to the adjudicating authority for re- consideration after considering the customs adjudication order - Appeal allowed by way of remand.

Summary

Issues involved:
The case involves the denial of cenvat credit based on alleged forgery in licenses used for importing goods, leading to the question of the validity of bills of entry for availing cenvat credit.

Details of the judgment:

Issue 1: Denial of cenvat credit based on alleged forgery in licenses
The appellant cleared imported goods under VKGUY/DEPB licenses issued by DGFT, later found to be forged. The appellant paid the custom duty foregone upon discovering the fraud. While the duty was appropriated, penalties were set aside. The appellant availed cenvat credit based on bills of entry assessed using the forged licenses. The department contended that the bills of entry, being based on forged licenses, were invalid for cenvat credit. The appellant argued that they were not involved in the forgery, citing precedents where penalties were dropped for similar cases. The Tribunal noted the need to consider the customs adjudication order in the matter and remitted the case back for re-consideration based on the customs adjudication order.

Issue 2: Remand for re-consideration based on customs adjudication order
The Tribunal set aside the impugned order and allowed the appeal by remanding the case to the Adjudicating Authority for a de-novo order within two months, emphasizing the importance of considering the customs adjudication order in the decision-making process.

This judgment highlights the significance of considering all relevant adjudication orders in related matters and ensuring a fair and comprehensive assessment of the facts before making a decision on the denial of cenvat credit based on alleged forgery in licenses.