2009 (8) TMI 909 - AT - Central Excise

Tribunal affirms decision for respondent, penalties imposed. Emphasizes need for evidence.

COMMR. OF C. EX., MUMBAI Versus PRAKASH INDUSTRIAL CORPORATION

The tribunal upheld the decision in favor of the respondent, dismissing the revenue's appeal. It found no infirmity in the order imposing penalties and ... CENVAT credit - bogus invoices - it was alleged that the SSMIPL has purchased the goods from Beldev Ship Breakers (who is not existing since long) - Held that: - The revenue has failed to bring the evidence on record that “the respondent has contravened the provisions of law”. The revenue arrived on the conclusion without investigation and evidence - the department did not bother to investigate the matter relating to the other seven invoices. Moreover, the department did not bother to investigate the actual vehicle numbers used in transportation of goods to the place of the respondent - appeal dismissed - decided against Revenue. Issues involved:1. Imposition of penalty on the respondent under Rule 25 of Central Excise Rules, 2002 and a personal penalty on the Proprietor under Rule 13 of Cenvat Credit Rules, 2002.2. Allegations of fraudulent passing on of Cenvat Credit by the respondent.3. Appeal against the order revoking Central Excise Registration issued to the respondent.Analysis:Issue 1: The appeal filed by the revenue challenged the impugned order imposing a penalty on the respondent under Rule 25 of Central Excise Rules, 2002 and a personal penalty on the Proprietor under Rule 13 of Cenvat Credit Rules, 2002. The revenue contended that the respondent contravened the provisions by issuing cenvatable invoices without receiving duty paid goods, leading to fraudulent passing on of Cenvat Credit. The investigation revealed discrepancies in the transportation of goods and non-existence of certain units involved in the transactions.Issue 2: The main contention was whether the respondent received iron and steel scrap from the first stage dealers under legitimate invoices. The revenue argued that the respondent did not receive the physical goods but only fake invoices, making them ineligible for Cenvat credit. However, the respondent's advocate presented invoices to refute these claims, highlighting discrepancies in the investigation and lack of concrete evidence proving contravention of the law.Issue 3: The appeal also involved a challenge against the revocation of Central Excise Registration issued to the respondent. The appellate tribunal upheld the impugned order, stating that the revenue failed to provide substantial evidence of contravention by the respondent. The tribunal emphasized the importance of thorough investigation and evidence before concluding non-compliance with the law.Overall, the tribunal found no infirmity in the impugned order and upheld the decision in favor of the respondent, disposing of the revenue's appeal accordingly. The judgment emphasized the necessity of concrete evidence and proper investigation to establish violations of the law in cases involving penalties and revocation of registrations.