2009 (7) TMI 1053 - AT - Central Excise

Court overturns penalties for improper invoicing, stresses evidence assessment and burden of proof.

TATA STEELS LTD. Versus COMMISSIONER OF C. EX., CHANDIGARH

The judgment set aside penalties imposed on registered dealers for issuing invoices without supplying material to pass Cenvat credit, emphasizing the ... - Issues:Penalties imposed on registered dealers for issuing invoices without supplying material to pass Cenvat credit, reliance on relevant records, failure to establish material supply, reliance on vehicle numbers in invoices, burden of proof on the assessee, consideration of evidences, setting aside penalties based on newspaper reports, remand for fresh decision.Analysis:The judgment dealt with the common issue of penalties imposed on registered dealers for issuing invoices without supplying material to pass Cenvat credit to manufacturers of final products. The Advocate for the Appellant argued that penalties were unjust as relevant records proved material supply, citing a Division Bench decision in a similar case. On the other hand, the Revenue representatives contended that investigation revealed discrepancies in the vehicle numbers mentioned in the invoices, indicating potential non-supply of material. They relied on a Tribunal decision in a comparable case to support their stance.Upon examination of the impugned orders, it was found that the Commissioner (Appeals) had initially set aside penalties and duty based on newspaper reports indicating a prevalent issue of fake vehicle registrations in Punjab. However, a change in decision occurred due to the perceived lack of remedial action by the appellants. The judgment highlighted that penalties cannot be solely upheld based on newspaper reports without proper examination of evidence. Reference was made to the Division Bench decision in a related case to emphasize the importance of assessing evidence in such matters.The Tribunal's decision in another case established that the burden initially lies on the department to show non-receipt of inputs in the factory of production, shifting to the assessee if discrepancies in transportation capacity are identified. As the Revenue discharged the initial burden in the present case, the onus shifted to the appellant to prove receipt and use of duty-paid goods in manufacturing excisable products. Consequently, the impugned orders were set aside, and the matter was remanded for fresh adjudication in line with the Tribunal's decision in the cited case.In conclusion, the judgment set aside the impugned orders and remanded all matters to the adjudicating authority for a fresh decision based on the principles outlined in the Tribunal's decision. The appeals were allowed by way of remand, emphasizing the importance of proper assessment of evidence and burden of proof in cases involving penalties for non-compliance with Cenvat credit regulations.