2023 (3) TMI 1068 - AT - Central Excise

Levy of penalty u/r 26(1) of Central Excise Rules, 2002 - availment of CENVAT Credit fraudulently - receipt of bills without receipt of finished goods - HELD THAT - here is no dispute about the fraudulent availment of Cenvat Credit by M/s. Tarun Polymers, Daman, who has wrongly availed the Cenvat Credit of huge amount of 29170642/-. In order to avail this fraudulent Cenvat credit by M/s. Tarun Polymers, Daman, all buyers of the goods purchasing the goods without cover of invoice have clearly facilitated M/s. Tarun Polymers, Daman for wrong availment of CENVAT Credit. In case of M/s. Rajguru Enterprises Pvt Ltd it is clear that though they have received the bills but not received the goods covered therein. Therefore, in the above facts it is a clear case of abatement in evasion of duty on the part of the appellants. Thus, it is clear that all the appellants were indulged in abating M/s. Tarun Polymers, Daman for fraudulent availment of Cenvat credit therefore, they have made themselves liable for penalty under Rule 26(1) Cenvat credit rules 2002 - there are no infirmity in the impugned order imposing penalty under Rule 26(1) of Central Excise Rules - the impugned order to the extent it imposes penalty on the present appellants is upheld - appeal dismissed.

Summary

Issues involved:
Challenge against imposition of penalty under Rule 26(1) of Central Excise Rules, 2002 for purchasing inputs without cover of invoice and facilitating fraudulent Cenvat credit availment by the supplier.

Summary:

Issue 1: Challenge against penalty imposition for purchasing inputs without cover of invoice
The appellants contested the penalties imposed under Rule 26(1) of Central Excise Rules, 2002, except for one entity, on the grounds that they received invoices but not the goods physically. They argued that since they did not handle the goods, they should not be liable for penalties. Additionally, they claimed that since the goods were duty paid, there should be no penalty for the buyers. The appellants relied on specific judgments to support their position.

Issue 2: Facilitation of fraudulent Cenvat credit availment
The Assistant Commissioner representing the Revenue reiterated the findings of the impugned order, emphasizing the fraudulent availment of Cenvat Credit by the supplier. The presiding Member considered both sides' submissions and the records, finding that the supplier had wrongly availed a significant amount of Cenvat Credit. The appellants were found to have facilitated the fraudulent Cenvat credit availment by purchasing goods without proper invoices. The judgment detailed the involvement of various buyers in facilitating the supplier's illegal activities and concluded that all appellants were engaged in abetting the fraudulent Cenvat credit availment. As a result, the penalty imposition under Rule 26(1) of Central Excise Rules, 2002, was upheld, and the appeals were dismissed.

Separate Judgment by Judge:
No separate judgment was delivered by the judge mentioned in the case.