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TMI Blog2013 (9) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... not chosen to make any efforts to produce any evidence to show such receipt of goods - appellant was a party to the conspiracy of passing on cenvat credit without actually supplying the goods. Benefit of Reduced Penalty - Whether the Commissioner (Appeals) was right in allowing the benefit of reduced penalty if the payment of Cenvat credit demanded with interest and 25% towards penalty was made within thirty days of communication of the order - Held that:- The fact that original adjudicating authority had extended such a facility, no appellate authority could once again make similar offer - even after the original adjudicating authority had given an option, similar option can be extended again at the appellate stage can be said to have laid down such a ratio - The original adjudicating authority had extended the option in paragraph 14(3) of his order - once an option was given, if the appellant failed to utilise the same, such an option cannot be extended again – Decided in favor of Revenue. Penalty - Held that:- Taking note of the fact that total wrong credit was availed and the appellant will have to pay mandatory penalty of 100% having not availed the option given and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .D. of M/s. Matiz Metals Pvt. Ltd.; that the LRs showing transportation of goods from M/s. Shakti Enterprises to different manufacturers of articles of copper were provided by Shri Rajesh Kumar Sharma, who is working for Shri Surendra Kumar Aggarwal; that the manufacturers of articles of copper to whom he had supplied cenvatable invoices were giving cheques which were deposited in the account of M/s. Shakti Enterprises; that the amounts from the Account of M/s. Shakti Enterprise were withdrawn in cash and after deduction of commission for issue of cenvatable invoices, the balance amounts were paid in cash. The investigation thus revealed that M/s. Shakti Enterprises neither received the inputs from M/s Matiz Metals Pvt. Ltd nor supplied the same to the manufacturers of articles of copper but only cenvatable invoices were issued to enable the buyers to fraudulently avail cenvat credit. 2.3. The scrutiny of invoices of M/s Matiz Metals Pvt. Ltd received by M/s. Shakti Enterprises and scrutiny of invoices issued by M/s Shakti Enterprises to different manufacturers revealed that against the invoice Nos.9 dated 29.04.2004 and 17 dated 04.05.2004 of M/s Matiz Metals Pvt. Ltd., M/s. Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual to the demanded amount. Penalty of Rs.1,00,000/-, Rs.50,000/- and Rs.10,000/- were imposed on Shri Vishnu Kumar Agarwal, Director of CEPL, M/s. Shakti Enterprises and M/s. Ankit Transport Corporation. Appeals have been filed only by CEPL and Shri Vishnu Kumar Agarwal against the impugned order upholding the order of the original adjudicating authority was issued against which the appeals are before me. Revenue is also in appeal against the decision of the Commissioner in the impugned order allowing CEPL to pay the entire amount of interest and penalty to the extent of 25% within thirty days of the order. 4. The ld. counsel for the appellants submitted that in this case the whole case is based on the statement of the transporter who stated after four years of the availment of credit that LRs had been simply issued without actual transportation of the goods. He also submits that when the statement was recorded Shri Bajrang Jangra was no longer with M/s. Ankit Transport Corporation but only on the basis of memory he had given the statement. He also submitted that appellant had made the payment for the goods by cheque and properly accounted for the goods in the statutory records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued and did not contest the charges and has not even appealed against the order passed. This would obviously show that the transporter stood by the statement of the authorised signatory and had no defence to offer and therefore did not appear at all. The very fact that orders were placed for goods on M/s. Shakti Enterprises even though the Managing Director of the appellant knew Shri Surendra Kumar Aggarwal, Managing Director of M/s. Matiz Metals Pvt. Ltd., the manufacturer and received the invoices issued by M/s. Shakti Enterprises from Shri S.K. Aggarwal would show that the appellant clearly was a party for the racket with M/s. Matiz Metals Pvt. Ltd. As regards the statement of the appellant that department would not be loosing any revenue because duty demand has been confirmed against M/s. Matiz Metals Pvt. Ltd., he submits that the proceedings initiated against M/s. Matiz Metals Pvt. Ltd. are not relevant to the case in hand and what is to be seen is whether CEPL is eligible for the cenvat credit or not and not whether the amount has been recovered by the department elsewhere. As regards the statement of the proprietor of M/s. Shakti Enterprises and authorised signato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within one month of issue of order in appeal. He requested to reduce penalty on the director.When this was pointed out to the ld. counsel he submitted that appellants had contested the issue on merit before the Commissioner (Appeals) and he submits that in the appeal memorandum before the Tribunal also they have contested the issue on merits. However, I am not convinced with the arguments. In fact after the submission in personal hearing, the ld. Commissioner was required to consider only the issue of eligibility of the appellant for reduced penalty and issue of penalty on the director. Nevertheless Commissioner has proceeded to consider the issue on merits. If the Commissioner (Appeals) were to follow convention and taking note of the submissions were to consider only the issue of reduced penalty on the CEPL and reduction of penalty on the director, the appellant would not have an opportunity of contesting the issue at all having admitted the liability. In this view of the matter, in my opinion the case against the appellant has to be upheld and the only issue is to be considered is whether CEPL is entitled to the benefit of reduced penalty under Section 11AC of Central Excise and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him and has chosen not even to contest the penal proceedings against him. He has not bothered even to reply to show cause notice. First of all M/s. Ankit Transport Corporation is a co-noticee and on that ground it can be said that cross examination was not required, more so, when the co-noticee chose not to contest the proceedings. In such a situation a cross examination would serve no purpose since the very fact that M/s. Ankit Transport Corporation has not replied to show cause notice; has not contested the order in original and has not contested the statement of an employee who had left them already would all go against the appellant straightway. 11. Once the department produced prima-facie evidence to show that M/s. Matiz Metals Pvt. Ltd. did not supply the goods to M/s. Shakti Enterprises and M/s. Shakti Enterprises did not supply the goods to CEPL and the transporter admitted not transporting the goods, the burden to show that there was actually receipt of the goods would fall on the appellant. CEPL have not chosen to make any efforts to produce any evidence to show such receipt of goods. 12. It was also submitted that there was no inculpatory statement of Shri Vishnu Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no answer; there is no answer as to why the duplicate copy of the invoice did not accompany the goods; there is no answer as to why the transporter admitted that the goods were not transported by him at all; there is no answer as to why Shri Gaurav Gupta had admitted the liability before the Commissioner (Appeals) much after the proceedings were initiated. Under these circumstances it can be said that appellant was a party to the conspiracy of passing on cenvat credit without actually supplying the goods. 15. In view of the above observations, the demand for wrongly availed cenvat credit is sustainable with interest. 16. The next issue is whether the Commissioner (Appeals) was right in allowing the benefit of reduced penalty if the payment of Cenvat credit demanded with interest and 25% towards penalty is made within thirty days of communication of his order. I am inclined to agree with the submission of the ld. A.R. that in view of the fact that original adjudicating authority had extended such a facility, no appellate authority could once again make similar offer. None of the decisions relied upon by the Commissioner to come to a decision that even after the original adj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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