9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (7) TMI 396 - AT - Central ExciseCENVAT Credit - Fraudulent invoices - Penalty - Held that - the description of the goods in invoice and actual goods received are tallied and, therefore, the case law Amex Alloys Pvt. Ltd. (2013 (8) TMI 129 - CESTAT CHENNAI) would not apply herein. In view of that, the demand of duty along with interest and penalty on the appellant assessee is not sustainable. Penalty on registered dealer - Held that - They have admitted that they have issued invoices without accompanying with the goods. These facts were supported by the statement of first stage dealer. Therefore, they are liable to penalty. - Tribunal in the case of Amex Alloys Pvt. Ltd. & Another (2013 (8) TMI 129 - CESTAT CHENNAI) following the decision of the Hon ble High Court upheld the penalty on the registered dealer. However, penalty reduced ₹ 1,62,500.
Issues:
1. Disallowance of Cenvat credit on MS Scrap 2. Imposition of penalty under Rule 25 of the Central Excise Rules, 2002 Issue 1: Disallowance of Cenvat credit on MS Scrap: The case involved M/s. Sam Turbo Industries Ltd. purchasing MS Scrap from M/s. Chennai Steels, a registered dealer. A Show Cause Notice was issued proposing to disallow Cenvat credit availed by M/s. Sam Turbo Industries Ltd. on MS Scrap. The adjudicating authority confirmed the demand of Cenvat Credit and imposed penalties. The Commissioner (Appeals) upheld the order. The appellant argued that they received MS Scrap with proper invoices and made payments via cheque. They contended that there was no malafide intent and the extended limitation period should not apply. The Director of the company confirmed receiving and using the MS Scrap in manufacturing finished products. The Tribunal found that the appellant recorded the inputs in their Cenvat register and utilized the MS Scrap in finished goods as confirmed by the Director's statement. The Tribunal noted that the description of goods in invoices matched the actual goods received, distinguishing this case from precedents where discrepancies existed. Consequently, the demand of duty, interest, and penalty on the appellant was deemed unsustainable. Issue 2: Imposition of penalty under Rule 25 of the Central Excise Rules, 2002: The penalty was imposed on M/s. Chennai Steels for issuing invoices without accompanying goods, as admitted by the proprietor in some cases. The Tribunal upheld the penalty on the registered dealer based on precedents and reduced it to a specific amount considering the circumstances. The Tribunal agreed with the Revenue's submission that issuing invoices without materials warranted a penalty. The case law and statements supported the liability of M/s. Chennai Steels for penalties. The Tribunal reduced the penalty amount for M/s. Chennai Steels. Ultimately, the appeal filed by M/s. Sam Turbo Industries Ltd. was allowed, granting consequential relief, and the appeal filed by M/s. Chennai Steels was disposed of accordingly. This judgment highlights the importance of proper documentation and adherence to rules in availing Cenvat credit and the consequences of issuing invoices without accompanying goods. The Tribunal's detailed analysis of statements and precedents demonstrates a thorough consideration of facts and legal principles in reaching its decision.
|
