2009 (7) TMI 614 - AT - Central Excise

Registration- suppression- the respondents obtained Central Excise Registration Certificate. On 21-6-2005, Range Officers verified the factory premises and found some construction work was going on and plant and machinery was yet to be installed. A show cause notice was issued to show cause as to why the registration certificate should not be cancelled for contravention of the provisions of the Central Excise Rules by not providing the required information as required by the Department for proper verification of the post facto registration and also by not maintaining and keeping the records in the premises The Original Authority suspended the Registration Certificate till further orders. It was directed not to indulge in any fraudulent activities as well as clearance of the goods by issuing any invoices as required under Rule 11 of the Central Excise Rules, 2002 till the suspension is revoked by any competent authority. The Commissioner (Appeals) set aside the suspension of the Registration Certificate. Hence, Revenue filed this appeal. Held that- The Original Authority suspended the Registration Certificate with the apprehension that the Registration Certificate was obtained to issue fake invoices to pass the Cenvat credit and to misuse of Cenvat credit. Thus, the impugned order is set aside. The matter is remanded back to the Original Authority to decide afresh on the basis of above direction. The respondents are directed to produce the documents in support of their contention at the time of personal hearing. The appeal is allowed by way of remand.

Summary

Issues:
Suspension of Central Excise Registration Certificate for contravention of provisions - Violation of Rule 22(3) by failing to provide records - Allegations of fraudulent activities and misuse of Cenvat credit - Remand for further investigation and decision by Original Authority.

Analysis:

1. The case involved the suspension of a Central Excise Registration Certificate due to alleged contravention of provisions by the respondents. The Range Officers found incomplete construction work and uninstalled plant machinery during a verification visit. A show cause notice was issued for not providing required information for verification and not maintaining records on the premises. The Original Authority suspended the certificate, prohibiting fraudulent activities and goods clearance. The Commissioner (Appeals) later set aside the suspension, leading to the Revenue's appeal.

2. The main contention was the respondents' violation of Rule 22(3) by failing to supply records despite multiple requests from jurisdictional officers. It was also highlighted that duty paying documents and invoices supporting credit transactions were not provided. Additionally, the respondent's proprietor was linked to a fraud case involving fake invoices for Cenvat credit.

3. The Commissioner (Appeals) noted a delay in production commencement and disregarded investigations against other units linked to the proprietor as grounds for suspension. The focus was on the specific violations related to record-keeping and compliance with excise rules, rather than external factors.

4. The appellate authority found that the suspension was based on the respondents' failure to provide necessary records and incomplete manufacturing activities. Concerns were raised about potential misuse of the Registration Certificate for issuing fake invoices and misusing Cenvat credit, warranting further investigation. Consequently, the matter was remanded to the Original Authority for a fresh decision based on the given directions.

5. Ultimately, the impugned order was set aside, and the case was remanded for the Original Authority to reevaluate based on the new directives. The respondents were instructed to produce supporting documents during the hearing. The decision highlighted the importance of compliance with excise rules and the need for thorough investigation before taking action on the Registration Certificate.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the subsequent legal considerations leading to the decision for remand and further investigation by the Original Authority.