2013 (8) TMI 608 - AT - Central Excise

Transportation evidence discrepancies impact ABS resin procurement cenvat credit demand decision

M/s Dhiman Engineering Corporation and others Versus CCE, Delhi-IV

The Tribunal found discrepancies in transportation evidence and weight variances in the case involving cenvat credit demand for ABS resin procurement. ... Demand of CENVAT credit – Bogus invoices - Interest and Penalty u/s 11AC - Held that:- Prima-facie the evidence in support of both the grounds for alleging that there was no supply of goods by the registered dealers was doubtful - the vehicle of the transport company were not involved - in the present group of appeals there were two transporters, the owners of vehicles had stated that they had not transported the goods - in view of the findings of the Commissioner (Appeals) it appeared that assesse may issued bogus invoices showing transportation of the goods in the vehicle - the department’s case was that notwithstanding the truck owners statement confirming transport of the goods, their claim cannot be accepted as the quantity mentioned in the invoices was much more the load which the vehicle can legally carry. Stay Application - Prima-facie the assesse cannot make out the case for total waiver – 1.5lakhs were ordered to be submitted as pre-deposit – upon such submission rest of the duty to be stayed till the disposal of the case - Stay granted. Issues:Cenvat credit demand based on invoices authenticity and transportation evidence.Analysis:The case involved M/s Dhiman Engineering Corporation facing cenvat credit demand for invoices issued by M/s Jagruti Resins (P) Ltd. and M/s Shree Sai International for ABS resin procurement. The department doubted the transportation of goods based on discrepancies in records and weight discrepancies. The Additional Commissioner confirmed the demand and imposed penalties on various parties under Rule 26(2) of Central Excise Rules. On appeal, penalties were upheld with some reductions. The main arguments by the appellant focused on the authenticity of invoices and transportation evidence. The department contended that evidence indicated fabricated transport documents and false transportation claims. The Commissioner (Appeals) found discrepancies and upheld penalties. The appellant argued against the findings, emphasizing the lack of concrete evidence to support the department's claims. The Tribunal considered the submissions and records, noting discrepancies in transportation evidence and weight discrepancies. While prima facie doubts existed, the Tribunal did not find sufficient grounds for total waiver. It directed M/s Dhiman Engineering Corporation to deposit a specified amount within a set period, waiving the remaining demand and penalties upon compliance. The requirement of pre-deposit of penalties for other appellants was waived for the appeal hearing. The stay applications were disposed of accordingly.This detailed analysis covers the issues of cenvat credit demand based on invoice authenticity and transportation evidence, highlighting the arguments presented by both parties and the Tribunal's decision based on the evidence and circumstances of the case.