Bogus transactions finding was factual, so no substantial question of law arose and central excise penalties failed.

The Tribunal's finding that the transactions were not bogus was based on appreciation of evidence, including a vague statement recorded under Section 14 of the Central Excise Act, 1944 that did not amount to a specific admission that the invoices were false. The Revenue also failed to rebut the assessee's explanation that no invoice covered quantities above the stated threshold and that copper rods were supplied to job workers for conversion. On that factual material, the allegation of bogus transactions was unproved, leaving no basis for penal consequences. No substantial question of law arose, and invocation of Section 11AC of the Central Excise Act, 1944 and Rule 173Q of the Central Excise Rules, 1944 was held unjustified.

---

---

Issues: Whether the Revenue had raised any substantial question of law arising from the Tribunal's findings that the transactions were not shown to be bogus and that the assessee had not received raw material without invoices.

Analysis: The Tribunal's conclusion rested on appreciation of evidence, including the statement recorded under Section 14 of the Central Excise Act, 1944, which was found to be vague and not a specific admission that the assessee's invoices were bogus. The Revenue failed to rebut the assessee's stand that no invoice covered quantities above the stated threshold and also did not controvert the explanation regarding supply of copper rods to job workers for conversion. On that material, the finding that the alleged bogus transactions were not proved was a pure finding of fact. In the absence of evidence establishing the bogus nature of the transactions, the foundation for invoking penal consequences could not survive.

Conclusion: No substantial question of law arose, and the appeals were liable to fail. The invocation of Section 11AC of the Central Excise Act, 1944 and Rule 173Q of the Central Excise Rules, 1944 was not justified.

---