2015 (10) TMI 1029 - AT - Central Excise

Duty evasion - CENVAT Credit - Bogus invoices - Parallel invoices - Held that - Duty demand against the appellant is based on the allegation that in respect of 1467 consignments of automobile parts had been sold to original equipment manufacturers (OEMs) and 409 consignments of automobile parts sold to non OEM customers, in respect of each such sale, the appellant have issued two invoices bearing the same number and same description of the goods but the date of invoices and duty debit particular are different. Out of two invoices, the invoice of earlier date was found to be containing bogus duty debit particulars. - The appellant s explanation that this practice had been adopted to facilitate their priority customers is not convincing, as during the same period in respect of other consignments i.e. in respect of 1318 consignments only one invoice has been issued and there was no such irregularity. In view of this, we hold that the impugned order confirming the duty demand of ₹ 2,05,53,961/- has to be upheld. Initially the goods had been cleared on payment of duty and on being found defective the same were returned by the customers for repair/reconditioning, and no credit of duty paid on the goods was taken by the appellant, in our view, while returning the goods after repair, no duty is required to be paid. Therefore, in these circumstances, even if the appellant cleared the defective goods under cenvatable invoices by showing duty payment particular which were found to bogus, no duty was demandable from them, as no duty is payable by the appellant in respect of defective goods returned by them to the customers after repair under Rule 173H. As regards the duty demand it is in respect of certain loose pre-authenticated invoices duly signed by the representative of the assessee and duly incorporating date and time of removal with PLA debit entry number and date. However, debit entry shown in the loose copies of invoices were found to be different from the duty payment shown in the same invoice number which were available in the records of the central excise authority. Since there is no explanation regarding this discrepancy, we are of the view the duty demand of ₹ 73,821/- has to be upheld. As the provisions of section 11AB had been introduced in Central Excise Act with effect from 28.9.96, the interest would be chargeable in respect of clearance during the period from 28.9.96 to November, 1996, No interest on duty confirmed for the period prior to 28.9.96 has been charged. However, penalty under Rule 173Q (1) (d) is upheld. - impugned order does show as to how the provisions of Rule 209A are attracted in the case of Shri Suresh Garg and Shri K.P.Chitrasenan, as we do not find any evidence of these persons dealing with the excisable goods in any manner in respect of which they had reason to believe that the same are liable for confiscation. Therefore, penalty on Shri Suresh Garg and Shri K.P.Chitrasenan is set aside. However, as regards imposition of penalty on Shri V.K.Mehta, Managing Director under Rule 209 is upheld. - Decided partly in favour of assessee.

Summary

Issues:
1. Allegations of duty evasion against the appellant company
2. Ex-parte decision due to absence of appellant representation
3. Confirmation of duty demand by the Commissioner
4. Adjudication of duty demands and penalties

Analysis:
1. The case involved allegations of duty evasion against the appellant company, including issuing parallel invoices with bogus duty payment details, clearance of defective goods without proper duty payment, discrepancies in signed invoices, and loose pre-authenticated invoices with differing duty payment details. The Commissioner confirmed a total duty demand of &8377; 2,15,68,150 along with interest and penalties against the appellant and its employees.

2. Due to the absence of representation by the appellant during the proceedings, the case was decided ex-parte. Despite prior notices and communication attempts, the appellant did not participate, leading to a one-sided decision-making process.

3. The Commissioner's order confirming the duty demand was challenged in the appeals. The Tribunal upheld duty demands totaling &8377; 2,06,26,961, while setting aside certain demands related to defective goods and signed invoices. Interest under section 11AB was chargeable for a specific period, and penalties were imposed on the Managing Director but set aside for other employees.

4. The Tribunal's detailed analysis considered each aspect of the duty demands, evaluating the validity of the allegations and explanations provided by the appellant. The decision differentiated between sustainable duty demands and those lacking proper justification, leading to a partial confirmation of the Commissioner's order with modifications in penalties and interest charges.