2009 (2) TMI 434 - HC - Central Excise

Cenvat - Fraudulent availment of credit - Tribunal order holding credit availment without receipts of goods fraudulent. Plea on limitation not acceptable. Appellant contending that proceedings against supplier dropped by Tribunal. Submission of appellant not having merit since Tribunal order containing categorical findings against appellant while no such findings recorded in case of supplier. Held that - Appeal wholly misconceived and dismissed.

Summary

Issues: Appeal against order under Central Excise Act - Availment of Modvat credits - Transportation of inputs found to be fake - Applicability of period of limitation under Section 11A - Categorical findings against appellant - Dismissal of appeal.

The judgment pertains to an appeal filed under Section 35G of the Central Excise Act against an order by the Custom, Excise & Service Tax Appellate Tribunal, New Delhi. The Tribunal found that the inputs for which Modvat credits were availed by the appellant-dealer were never transported, with 133 cases of transportation being deemed fake after examining the owners of the vehicles involved. This led to a conclusion that the appellant had received the goods, making the availment of Modvat credit illegal and fraudulent.

The court, comprising M.M. Kumar and H.S. Bhalla, JJ., thoroughly considered the arguments presented by the appellant's counsel, particularly regarding the applicability of the period of limitation under Section 11A of the Act. The appellant contended that a show cause notice should have been issued within one year of the Revenue's knowledge, citing a Supreme Court judgment in another case. However, the court distinguished the cited judgment, emphasizing that in the present case, the first show cause notice was issued in a timely manner, rendering the appellant's arguments without merit.

Furthermore, the appellant's counsel raised a point regarding the supplier of material, M/s. H.B.R. Steel Corporation, who had faced proceedings that were ultimately dropped by the Tribunal. The court, after careful consideration, found no merit in this argument, highlighting the Tribunal's categorical findings against the appellant compared to the lack of such findings against the supplier. Consequently, the court deemed the appeal to be wholly misconceived and dismissed it accordingly.

In conclusion, the court upheld the Tribunal's decision, finding no merit in the appellant's arguments related to the period of limitation and the proceedings against the supplier. The appeal was ultimately dismissed, affirming the Tribunal's findings regarding the illegal and fraudulent availment of Modvat credits by the appellant-dealer.