2000 (3) TMI 669 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand under Rule 57-I and imposition of penalty under Rule 53Q (173Q) by the Additional Commissioner of Central Excise.
2. Dismissal of appeal by the Commissioner (Appeals) Chandigarh.
3. Appeal against the order of the Commissioner (Appeals) Chandigarh regarding Modvat credit and penalty imposition.

Issue 1:
The Additional Commissioner of Central Excise, Chandigarh confirmed a demand of Rs. 1,51,924 under Rule 57-I on the appellants and imposed a penalty of Rs. 1,50,000 under Rule 53Q (173Q) for taking Modvat credit on fake invoices issued by M/s. Hindustan Zinc Ltd. The Additional Commissioner found that the party fabricated documents with malafide intent to misuse the Modvat credit, causing a potential loss to the government exchequer. The party argued that they were entitled to the credit based on rules allowing credit on inputs received after filing a declaration under Rule 57G and on inputs lying in stock or in finished goods on the declaration date. They claimed that a lapse in filing the claim led to the date manipulation on the invoices.

Issue 2:
The appeal made by the party before the Commissioner (Appeals) Chandigarh was unsuccessful, with the appellate authority upholding the lower authority's order. The Commissioner (Appeals) found no merit in the party's contentions and dismissed their appeal, leading to the party filing a further appeal against this decision.

Issue 3:
In the present appeal, the party argued that despite the date manipulation on the invoices, they were entitled to the credit as the goods relevant to the invoices were in stock on the declaration date. However, the Additional Commissioner found that the invoices were fake and not issued by M/s. Hindustan Zinc Ltd., as confirmed by a statement from the company's Dy. Manager. The original authority concluded that intentional availing of Modvat credit on fake invoices constituted a serious violation of rules, justifying the penalty imposition. Consequently, the appeal was rejected based on the findings that the invoices were not genuine and the party's actions amounted to a fraudulent act.

This detailed analysis provides a comprehensive overview of the legal judgment, addressing each issue involved in the case thoroughly.