2010 (1) TMI 553 - AT - Customs

Rebate obtained fraudulently - fraudulent accounting of rebate claim received from the excise department - rebate cheques were issued in the name of firm which was in reality created only for the purpose and owner was a dummy - appellant is no longer doing any business and has no financial resources to pay pre-deposit Held that - appellant should be required to deposit at least a portion of the rebate amount, attributed to him.

Summary

Issues involved:
- Appeal against demand for rebate of excess duty
- Imposition of penalties under various sections
- Delay in filing appeal under Section 117 of Customs Act, 1962
- Role of the appellant in fraudulent activities
- Justification of penalties imposed

Analysis:

1. The appeal was filed against the demand for 33.33% rebate of excess duty obtained fraudulently. Penalties equal to the rebate amount were imposed on the appellant, along with an additional penalty under the Cenvat Credit Rules, 2004. Further penalties were also imposed under Section 117 of the Customs Act, 1962.

2. The appellant filed an appeal after a delay of 46 days due to filing in the wrong format. The delay was condoned as reasons were deemed acceptable.

3. The appellant was found to be involved in fraudulent activities, benefiting from rebates obtained without exporting goods. The appellant's role included opening bank accounts, obtaining blank cheques, and making payments to parties involved in the scheme. The appellant argued that the demand for rebate and penalties imposed were unjustified, claiming a lesser role in the fraudulent activities.

4. The Departmental Representative contended that the appellant played a significant role in creating a dummy firm, opening bank accounts, and receiving a share of the fraudulent rebates. The penalties imposed were justified based on the appellant's involvement in the fraudulent activities.

5. The Tribunal considered submissions from both sides and found the case against the appellant was supported by statements from involved parties. The appellant's limited role defense was rejected, as evidence showed awareness of the fraudulent scheme. The Tribunal concluded that the appellant played an active role in the fraudulent activities, leading to the improper rebate claims.

6. In light of the evidence and circumstances, the Tribunal found the appellant failed to establish a prima facie case in his favor. The appellant was directed to deposit a portion of the rebate amount attributed to him within a specified timeframe, considering the elapsed time since the rebate claim was sanctioned.

This detailed analysis highlights the key points and arguments presented in the judgment, providing a comprehensive overview of the legal issues addressed and the Tribunal's decision.