2016 (12) TMI 1386 - AT - Central Excise

CENVAT credit - forged invoices - time bar - Held that - I find that there is no dispute that the Cenvat Credit availed by the appellant on the invoices were found to be fake. The appellant is duty bound to take reasonable steps while taking the Cenvat Credit. Therefore, the appellants are also responsible for availing the credit on the fake invoices - appeal dismissed - decided against appellant.

Summary

Issues Involved:
Cenvat credit availed on fake invoices, imposition of penalties, time limitation for demand, penalty on the director of the company, confiscation and redemption fine.

Cenvat Credit on Fake Invoices:
The case involved the appellant availing Cenvat Credit on fake invoices issued by a supplier. The Commissioner upheld the demand, interest, and penalty, except for confiscation due to unavailability of goods. The appellant argued lack of awareness regarding the fake invoices and absence of mala fide intention, citing relevant case laws. However, the Tribunal found the appellant responsible for verifying the genuineness of documents before availing Cenvat Credit, upholding the Assistant Commissioner's order.

Time Limitation for Demand:
The appellant contended that the demand was time-barred as there was no suppression of facts, relying on a Supreme Court judgment. However, the Tribunal disagreed, citing the fraudulent nature of the invoices, making the provisions of Section 11AC applicable for recovery extending beyond one year.

Penalty on Director of the Company:
Regarding the penalty imposed on the director of the company under Rule 26(1) of the Central Excise Rules, the Tribunal noted that the director accepted the use of fake invoices for Cenvat Credit. As the director was involved in the day-to-day activities and responsible for the company's actions, the penalty was deemed justifiable under the rule.

Confiscation and Redemption Fine:
The appellant argued against the imposition of redemption fine due to unavailability of goods for confiscation, citing relevant case laws. The Tribunal agreed, stating that since the goods were not seized and available for confiscation, there was no basis for imposing a redemption fine.

In conclusion, the Tribunal upheld the impugned order, dismissing the appeals and affirming the decision of the Assistant Commissioner. The judgment highlighted the appellant's responsibility to verify document authenticity for availing Cenvat Credit and justified the penalties imposed based on the fraudulent nature of the invoices and the involvement of the director in the company's activities.