2014 (7) TMI 1027 - AT - Central Excise

Tribunal confirms wrongful Cenvat credit, dismisses challenges on limitation and penalty. Upheld judgment on 21.4.2014.

M/s Singla Forgings (P) Ltd. Versus CCE, Delhi-III

M/s Singla Forgings (P) Ltd. Versus CCE, Delhi-III - TMI Issues:- Availment of Cenvat credit without receiving goods- Investigation findings against the appellant- Challenge on limitation and penalty impositionAnalysis:1. Availment of Cenvat credit without receiving goods:The case involved the appellant, engaged in manufacturing motor vehicle parts, availing Cenvat credit based on invoices issued by another manufacturer, M/s HSAL, without actually receiving the goods. Investigations revealed a scheme where products were cleared clandestinely to various manufacturers, including the appellant, with Cenvatable invoices issued to pass on wrongful credit. Statements from various individuals confirmed the diversion of goods and the wrongful credit availed by the appellant. The appellant's authorized representative admitted to availing credit without physical receipt of goods, leading to the conclusion that the appellant indeed took credit based on Cenvatable invoices without actual receipt of inputs.2. Investigation findings against the appellant:Further investigations at the transporter and manufacturer's end, along with statements from various individuals involved in the transportation chain, corroborated the fact that goods were not transported to the appellant's premises. The appellant's reliance on previous tribunal decisions was deemed inapplicable as the evidence in this case clearly pointed towards the appellant's wrongful availment of credit. The statements of the manufacturer, transporters, and the appellant's representative all aligned in confirming the non-receipt of goods by the appellant, strengthening the case against them.3. Challenge on limitation and penalty imposition:The appellant challenged the imposition of penalty and the limitation period for raising the demand. The tribunal rejected these challenges, citing the fraudulent nature of the credit availed and the discovery of the fraud only through exhaustive investigations. The tribunal upheld the longer limitation period invoked by the Revenue, considering the fraudulent nature of the appellant's actions. Merely reversing entries in the Cenvat account before the issuance of the Show Cause Notice was deemed insufficient to avoid penalty imposition in cases of fraud. The tribunal found no merit in the appellant's contentions regarding limitation and penalty imposition, ultimately rejecting the appeals.In conclusion, the tribunal upheld the findings based on detailed investigations, confirming the appellant's wrongful availment of Cenvat credit without receiving goods. The challenges on limitation and penalty imposition were dismissed, emphasizing the fraudulent nature of the appellant's actions and the evidence supporting the Revenue's case. The appeals were rejected, and the judgment was pronounced on 21.4.2014.