Bogus invoice penalty and pre-deposit relief limited where prima facie liability was found for pre-2007 conduct

Prima facie penalty was considered maintainable in a matter involving alleged issuance of bogus Cenvatable invoices, including for the period before 01.03.2007, on the view that a person purporting to sell goods while issuing invoices without actual supply could fall within Rule 25(1)(d) of the Central Excise Rules, 2002. On that basis, total waiver of pre-deposit was declined. The appellant was granted only conditional relief, with waiver of the balance penalty and stay of recovery subject to compliance with the directed deposit.

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Issues: Whether the appellant was entitled to total waiver of pre-deposit in a penalty matter arising from alleged issuance of bogus invoices, including whether penalty could prima facie be attracted for the relevant period prior to 01.03.2007.

Analysis: The appellant claimed that the invoices represented genuine supply and, in any event, that no provision then existed to penalise a registered dealer for issuing bogus Cenvatable invoices before 01.03.2007. The record indicated prima facie that the invoices were bogus, and reliance was placed on the view that even for the period prior to 01.03.2007 penalty could be imposed under Rule 25(1)(d) of the Central Excise Rules, 2002 on a person purporting to sell goods while issuing invoices without actual supply. In these circumstances, total waiver was declined, but conditional relief was granted.

Conclusion: The appellant was not entitled to full waiver of pre-deposit, but was directed to deposit Rs. 20,000/- and was granted waiver of the balance penalty and stay of recovery on compliance.

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