2015 (9) TMI 1580 - AT - Central Excise

CESTAT overturns duty demand & penalties against appellants, stresses resolving supplier case first for fair adjudication

Natraj Enterprises Versus CCE, Delhi-IV, Jwala Steel Corporation Versus CCE, Delhi-IV, Malik Iron Store Versus CCE, Delhi-IV, Kalra Steels P Ltd Versus CCE, Delhi-IV, Hem Prakash Goyal Director Versus CCE, Delhi-IV, Bhawani Steel Traders Versus CCE, Delhi-IV, Sunrise Steel Agency Versus CCE, Delhi-IV, Swastika Automatics Versus CCE, Delhi-IV, Jainsons Industries Versus CCE, Delhi-IV, Jawala Steel Corporation Versus CCE, Delhi-III, Faridabad Auto Comp System Private Ltd Versus CCE, Delhi-IV

The Appellate Tribunal CESTAT, New Delhi, allowed the appeals by setting aside the duty demand confirmation and penalty imposition orders against the ... Validity of proceedings initiated against appellant - the SCN issued to M/s. Jwala Steel Corporation, the supplier of goods are pending for adjudication - Held that: - the matter is remanded back to the concerned original authorities for passing reasoned and speaking orders, subsequent to the adjudication of the proceedings pending against M/s Jwala Steel Corporation - appeal allowed by way of remand. Issues: Proceedings initiated against appellants for confirmation of duty demand and penalty based on fake invoices issued by the supplier.Analysis:The judgment by the Appellate Tribunal CESTAT, New Delhi, involved multiple appeals with identical issues, leading to a common order. The case revolved around M/s. Jwala Steel Corporation, a manufacturer and trader of steel pipes, facing proceedings by the Central Excise Department due to alleged issuance of fake invoices by the supplier, enabling fraudulent cenvat credit for buyers. The Department targeted both M/s. Jwala Steel Corporation and the appellants, who were purchasers of the goods, for duty demand confirmation and penalty imposition. The appellants argued that proceedings against them should not proceed until the adjudication of show cause notices against the supplier. They cited previous Tribunal decisions where similar orders were set aside, emphasizing the need to resolve the case against the supplier before taking action against them.The Tribunal considered the submissions of the appellants and the Respondent's acknowledgment through the learned D.R., agreeing with the appellants' position. Consequently, the Tribunal set aside the impugned orders in all appeals and remanded the matter to the original authorities. The remand was contingent upon the adjudication of pending proceedings against M/s. Jwala Steel Corporation. The Tribunal directed the concerned authorities to issue reasoned and speaking orders post the resolution of the case against the supplier. Ultimately, the appeals were allowed through remand, providing a clear directive for further proceedings in light of the pending adjudication against M/s. Jwala Steel Corporation.In conclusion, the judgment highlighted the importance of resolving the primary case against the supplier before taking action against the purchasers. By setting aside the impugned orders and remanding the matter for fresh adjudication post the resolution of proceedings against M/s. Jwala Steel Corporation, the Tribunal ensured a fair and reasoned approach in dealing with duty demand confirmation and penalty imposition issues arising from the alleged issuance of fake invoices.