2014 (9) TMI 241 - HC - Central Excise

Availment of CENVAT Credit - Fraudulent passing of credit by Iron & Steel registered dealers - Held that - It is not denied by assessee what was supplied to them and what was noted in the source document was of different description. The contention of the assessee that they had no knowledge about the non-duty suffered scrap cannot be taken as a good defence in this case, particularly, when the assessee had no explanation as to its failure to advert due attention to the description of the goods in the invoice given to them and what had been infect supplied to them. - CESTAT rightly viewed that there are inherent contradictions seen in the document with regard to price and also the mismatch of the description of goods received by the assesses, thus, we do not find any good ground to take different view as that of the CESTAT. Thus with the Commissioner of Customs, Central Excise and Service Tax (Appeals), the Customs, Excise and Service Tax Appellate Tribunal, Chennai, thus, concurring on the finding of the Officer viz., Deputy Commissioner, Central Excise, Service Tax and Customs, we do not find any substantial question of law arise to admit the Civil Miscellaneous Appeal. - Decided against assessee.

Summary

Issues:
1. Interpretation of Rule 9(3) of the Cenvat Credit Rules, 2004
2. Limitation period for demand
3. Dismissal of appeal by Tribunal

Interpretation of Rule 9(3) of the Cenvat Credit Rules, 2004:
The case involves an assessee manufacturing Iron Castings who availed Cenvat Credit fraudulently from registered dealers. The Revenue found discrepancies in the Cenvat credit availed by the assessee from suppliers passing non-duty paid scrap as duty paid. The adjudicating authority ordered recovery of Cenvat credit, interest, and penalties under relevant rules. The Commissioner of Customs, Central Excise, and Service Tax (Appeals) highlighted the link between the assessee and the fraudulent invoices, leading to illegal advantage. The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) upheld the lower authority's decision, emphasizing the fraudulent nature of documents and the assessee's lack of awareness. The assessee argued they had no knowledge of the fraud, citing legal precedents. However, the Court disagreed, stating the CESTAT's findings were conclusive, rejecting the defense of lack of awareness.

Limitation period for demand:
The Tribunal found the demand not barred by limitation due to the fraudulent nature of transactions, leading to illegal advantage under the scheme. The CESTAT passed an ex parte order due to the assessee's failure to substantiate their case. Despite the assessee's argument based on legal precedents, the Court upheld the CESTAT's decision, emphasizing the inherent contradictions in the documents and the mismatch in goods received.

Dismissal of appeal by Tribunal:
The Court reviewed legal precedents cited by the assessee but found them inapplicable to the current case. The Supreme Court and Delhi High Court decisions relied on specific circumstances not present in this case. The Court concurred with the findings of the lower authorities and dismissed the Civil Miscellaneous Appeal, closing the connected Motion Petition. No costs were awarded, affirming the decision of the Deputy Commissioner, Central Excise, Service Tax, and Customs.