2016 (9) TMI 181 - AT - Central Excise

Cenvat credit - procurement of scrap - availed inadmissible Cenvat credit - getting invoices without receiving the goods in the factory premises with the aid of other noticees - Held that - it is found that the investigation proceedings, modus operandi and players involved were mostly common. From the order dated 26.6.2005, it is also found that the allegations and the defense of the various appellants are also the same. Therefore, by following the decision of division Bench of this Tribunal in case of Amar Ispat Pvt. Ltd. 2015 (11) TMI 373 - CESTAT MUMBAI , the Cenvat crdit is not admissible. - Decided against the appellant

Summary

Issues Involved:
1. Availing inadmissible Cenvat Credit.
2. Alleged diversion of goods.
3. Imposition of penalties under relevant rules.
4. Appeal against the impugned order.

Issue 1: Availing Inadmissible Cenvat Credit:
The appellants were accused of procuring duty-paid scrap through various means and availing the benefit of Modvat/Cenvat credit without receiving the goods, allegedly aided by brokers in the steel market. The investigation revealed that invoices were obtained without actual receipt of goods, leading to the issuance of a show-cause notice seeking to deny CENVAT Credit and impose penalties. The original adjudicating authority confirmed the demand, leading to an appeal before the Commissioner (Appeals) and subsequently before the Tribunal.

Issue 2: Alleged Diversion of Goods:
The investigation uncovered a scheme where goods were allegedly purchased from specific companies but diverted to different locations, implicating the appellants in the process. Statements recorded under Section 14 of the Central Excise Act revealed details of transactions involving brokers, transporters, and buyers. The appellants argued that they were not directly involved in the physical handling of goods but acted as intermediaries in the sale process. The Tribunal noted similarities with a previous case and dismissed the appeals based on common modus operandi and players involved.

Issue 3: Imposition of Penalties under Relevant Rules:
Penalties were sought to be imposed on the appellants under various rules, including Rule 13(1) of CENVAT Credit Rules, 2001/2002 and Rule 26 of Central Excise Rules, 2002. The appellants presented arguments challenging the imposition of penalties, citing lack of specific evidence linking them to the alleged diversion of goods. The Tribunal considered the defense presented by the appellants but ultimately relied on a previous decision to dismiss the appeals.

Issue 4: Appeal Against the Impugned Order:
The appellants approached the Tribunal after the Commissioner (Appeals) upheld the original adjudicating authority's decision to deny CENVAT Credit, impose penalties, and confirm the demand. The Tribunal reviewed the facts, arguments presented by both parties, and the similarities with a prior case involving similar allegations. Based on the previous decision and commonality in modus operandi, the Tribunal dismissed the appeals, affirming the penalties and denial of credit.

This detailed analysis of the legal judgment highlights the key issues, arguments presented by the parties, findings of the Tribunal, and the ultimate decision to dismiss the appeals based on the established similarities with a previous case.