2020 (1) TMI 584 - HC - Central Excise

Review of review order - dropping of proceedings against the assessee - HELD THAT - From the orders, it appears that after the matter was remanded to the Assessing Officer (AO) to enable the assessee to cross examine the witnesses, the prime witness Mr. Mamraj Singh Negi, Manager, TEPL retracted the statement with regard to receiving only invoices without any goods from BIPL and SMI and the assessee availing credit against those invoices. He further stated that the goods corresponding to the bills were always received and there was no case where the goods covered by the invoices were not received. The AO also verified the fact that every transaction amongst them was a recorded transaction and the payments were made through banking channel i.e. by way of cheque from the ledger and bank statements. The AO found that the noticee had maintained detailed account of every transaction and payments made by TEPL to the BIPL and SMI were in cheques only. It appears that the genuineness of transaction was in question on the basis of the complaint made by the petitioner. However, the fact that the transactions were not genuine has not been established since Mr. Mamraj Negi, Manager, TEPL retracted on his earlier statement in support of the complaint - That being in position, the grievance raised by the petitioner in the present petition, is not merited. Petition dismissed.

Summary

Issues:
1. Alleged fraud in availing CENVAT credits by a company.
2. Adjudication process and penalties imposed.
3. Review of the decision to drop proceedings against the company.
4. Petitioner's request for review and remuneration.

Analysis:
1. The petitioner informed authorities about suspected fraud by a company in availing CENVAT credits, leading to a Show Cause notice and subsequent penalties imposed by the Commissioner. The matter went through multiple adjudications and appeals, with penalties being imposed and then dropped against the company. The petitioner sought a review of the decision to drop the demand against the company.

2. The Court examined the original records produced by the respondents, which showed that the main witness retracted his statement regarding the alleged fraudulent transactions. The witness clarified that all transactions were genuine, goods were received against invoices, and payments were made through proper channels. The Assessing Officer verified the transactions and found them to be legitimate, with detailed records and payments made through cheques.

3. Despite the petitioner's complaint raising questions about the genuineness of the transactions, the witness's retraction and verification by the Assessing Officer indicated that the transactions were indeed genuine. The Court noted that the complaint was not substantiated, and the grievance raised by the petitioner lacked merit.

4. Consequently, the Court found no merit in the petitioner's claims and dismissed the petition, upholding the decision to drop the demand against the company. The Court did not find grounds for a review and rejected the petitioner's request for remuneration under the central excise rules for providing information.