2018 (6) TMI 1206 - AT - Central Excise

Penalty u/r 26(2) of the CER 2002 - issuance of bogus invoices without actual supply of goods - Held that - The adjudicating authority as well as the Ld. Commissioner (Appeals) after analyzing the statements and evidences on record arrived that the conclusion of the appellants had an active role in facilitating the clandestine removal as well as wrong availment of CENVAT Credit - The appellants have not produced any contrary evidences to rebut the findings of the authority below. Appeal dismissed - decided against appellant.

Summary

Issues:
Imposition of penalty under Rule 26(2) of the Central Excise Rule 2002.

Analysis:
The appeal was filed against an Order In Appeal passed by the Commissioner (Appeals-I)-Ahmedabad, focusing on the imposition of a penalty of ?47,506 on the appellant under Rule 26(2) of the Central Excise Rule 2002. The appellant argued that they should not be penalized as they were not responsible for the further movement of goods after delivery to the buyer's representative at their factory gate. They cited the judgment of the Tribunal in the case of Ispat Industries Vs. CCE 2008 (226) ELT 218 to support their stance.

The Revenue's representative supported the findings of the Commissioner (Appeals), alleging that the appellant's Ship Breaking Units had clandestinely cleared MS Plates to a specific entity and issued bogus invoices with the help of a broker, indicating the appellant's active involvement in fraudulent activities. The Revenue argued that the judgment in the Ispat Industries case was not applicable to the present scenario due to the specific circumstances of the case.

Upon review, the adjudicating authority and the Commissioner (Appeals) concluded that the appellants played an active role in facilitating clandestine removal and wrong availment of CENVAT Credit. The Commissioner (Appeals) highlighted the appellant's involvement in facilitating the receipt of plates clandestinely by another entity, leading to fraudulent availment of CENVAT Credit by subsequent entities in the supply chain. The appellant failed to provide any contrary evidence to challenge these findings.

Ultimately, the Tribunal upheld the impugned order, dismissing the appeal due to the lack of merit. The decision was based on the failure of the appellants to rebut the findings of the lower authorities and the established active role of the appellants in the fraudulent activities related to the clearance of goods and misuse of CENVAT Credit.

(Operative portion of the order pronounced in the open Court)