2015 (7) TMI 1438 - HC - Central Excise

Appeal Dismissed: Court Upholds CESTAT Order Allowing Modvat Credit Despite Allegations of Fraudulent Clearance.

The High Court dismissed the Department's appeal, upholding the CESTAT's final order, which allowed modvat credit despite allegations of forged documents ... Allowance of MODVAT credit on forged/fabricated documents/Bills of Entries under Rules 57A and 57G of Central Excise Rules, 1944 - HELD THAT:- It is noticed that the judgment VERA LABORATORIES LTD. VERSUS COMMISSIONER OF C. EX., VISAKHAPATNAM [2004 (11) TMI 366 - CESTAT, BANGALORE], wherein, as a matter of fact, which is the subject matter of the present appeal, was followed. It is found that the facts of the case on hand were taken into consideration and we do not find any distinction. In the absence of a specific question raised with respect to any perversity of fact and based on the submissions made by the learned Standing Counsel for the Department, the impugned final order cannot be interfered with. The Tribunal allowed the appeal of the respondents both on facts and on the ground of limitation. In the present appeal, there is no challenge with respect to the aspect of limitation. Appeal dismissed. Issues involved: Central Excise Appeal against Final Order, Modvat credit on forged documents, Allegation of clearing goods without payment of duty, Appeal before CESTAT, Discharge of tax liability, Barred by limitation.Central Excise Appeal: The Department filed an appeal against Final Order Nos. 252 to 254 of 2004 passed by CESTAT, questioning the allowance of modvat credit on forged documents under Rules 57A and 57G of Central Excise Rules, 1944.Allegation of Clearing Goods without Payment of Duty: The case involved a company accused of clearing goods fraudulently from a customs-bonded warehouse by utilizing demand drafts issued by different parties for customs duty payment. An adjudication Order-in-Original was passed against the company, levying duty and penalty.Discharge of Tax Liability: The Department contended that the company did not discharge its tax liability as the amounts deposited were utilized by the Customs House Agent (CHA) for others' duty payments. The Tribunal, however, found that the company had indeed discharged the duty liability.Barred by Limitation: The Tribunal allowed the appeal on the ground of limitation, which was not challenged in the present appeal, leading to the dismissal of the Department's appeal for lack of merits.Judgment Summary: The High Court, after considering the submissions and records, found no distinction between the present case and a previous judgment. As there was no specific challenge regarding factual perversity and in light of the Tribunal's decision on both facts and limitation, the Court upheld the impugned final order, dismissing the appeal. The appeal was deemed devoid of merits, and no costs were awarded. Any pending miscellaneous petitions were disposed of as infructuous.