2017 (9) TMI 1249 - AT - Central Excise

CENVAT credit - duty paying invoices - It has been alleged that the assessee availed CENVAT Credit on the basis of parallel set of invoices or trader s invoices and JVAT 304 P forms - clandestine removal - Held that - the entire demand of duty was raised on the basis of the records recovered from the premises of M/s Bharat Alloys Pvt. Ltd. - But the revenue in their grounds of appeal had not placed any evidence corroborative with the records of the assessee. It is well settled that the charge of clandestine removal cannot be established on the basis of the documents recovered from the premises of the third partly, unless, it is corroborative with the record of the assessee. Penalties on partners - Held that - the Commissioner (Appeals) already imposed penalty of equal amount of duty on the assessee. Further, the Adjudicating Authority had not categorically discussed the role of the partners for imposition of penalty. Therefore, the Commissioner (Appeals) rightly set aside the penalties on the partners. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Alleged availing of CENVAT Credit based on parallel set of invoices
- Recovery of documents from a different premises
- Demand of duty based on recovered records from a third party
- Imposition of penalties on partners of the assessee

Alleged Availing of CENVAT Credit:
The case involved M/s Salasar Steels, accused of availing CENVAT Credit on the basis of parallel set of invoices or trader's invoices and JVAT 304 P forms. Central Excise officers conducted a search operation and issued a Show Cause Notice alleging duty evasion. The Adjudicating Authority confirmed a duty demand of ?34,97,256/- with penalties. The Commissioner (Appeals) later reduced the duty demand to ?10,37,521/- along with interest and imposed a penalty equal to the duty amount. The Revenue appealed this decision, and the assessee filed a cross-objection.

Recovery of Documents from a Different Premises:
The Commissioner (Appeals) set aside the demand of duty concerning documents not recovered from the assessee's premises but from M/s Bharat Alloys Pvt. Ltd. The Commissioner questioned the lack of notice to M/s BAPL regarding duty evasion and highlighted the absence of evidence linking transactions between M/s BAPL and M/s Salasar. The Revenue argued that unaccounted raw materials were used to manufacture products evading duty, supported by documents from M/s Bharat Alloys. However, the Tribunal emphasized the need for corroborative evidence from the assessee's records to establish clandestine removal.

Demand of Duty Based on Recovered Records from a Third Party:
The entire duty demand was based on records recovered from M/s Bharat Alloys Pvt. Ltd., but lacked corroborative evidence from the assessee's records. The Tribunal emphasized that charge of clandestine removal must be supported by the assessee's records, not solely on third-party documents. The Commissioner (Appeals) partly confirmed the duty demand based on the assessee's records and documents.

Imposition of Penalties on Partners of the Assessee:
The Revenue argued for penalties on the partners based on a Tribunal decision, but the Commissioner (Appeals) had already imposed penalties equal to the duty amount on the assessee. The Tribunal noted the lack of discussion on partners' roles by the Adjudicating Authority and upheld the Commissioner's decision to set aside penalties on the partners.

In conclusion, the Tribunal rejected the Revenue's appeal and disposed of the cross-objection, finding no reason to interfere with the Commissioner (Appeals) order.