2017 (7) TMI 325 - AT - Central Excise

Dismissed appeal on duty issues remanded for further examination with penalty consideration.

Mahindra CIE Automotive Ltd Versus Commissioner of Central Excise, Pune-I

The appellant's appeal was dismissed on various counts including the re-crediting of duty on returned goods, evasion of duty through fictitious invoices, ... Re-crdit of duty on goods returned by the customer - Held that: - The appellant has no answer why such a procedure has been followed especially when jurisdiction is separate and the goods were received elsewhere is also not made known to the jurisdictional officer of Pune. Therefore, the appellants modus operandi does not exhibit that it has come out with clean hands when procedural deviation was made depriving Revenue to have control on appellant - appeal dismissed. CENVAT credit - fake and fictitious invoices - Held that: - details of invoices involving the above said duty not being available on record for examination at this stage, to reach to rational a conclusion, as to whether the invoices raised were fake and fictitious, the matter is remanded to the adjudicating authority to examine the genuinity of such invoices, the time gap between raising of the invoices and cancellation thereof, etc. - matter on remand. Generation of scrap - demand - Held that: - records do not reveal why that has not suffered duty. On that count, the appeal is dismissed. Penalty - interest - Held that: - to the extent of duty demand sustained as discussed thereinbefore, penalty shall be leviable and duty unpaid shall follow interest. Appeal allowed by way of remand. Issues:i) Re-credit of duty on returned goodsii) Evasion of duty through fictitious invoicesiii) Scrap generated by job-worker without duty supportiv) Levy of duty on goods claimed to be destroyedAnalysis:1. The appellant faced disputes regarding the re-crediting of duty on goods returned by customers. The goods reached Bangalore and Chennai factories but not Pune. The appellant failed to provide a satisfactory explanation for this procedural deviation, leading to a dismissal of the appeal on this count due to lack of transparency.2. The second issue involved the clearance of goods against disputed invoices, amounting to a duty of &8377; 53,62,232. The Revenue alleged that the invoices were fictitious, and the appellant failed to explain the creation of these invoices. The matter was remanded to the adjudicating authority for further examination of the genuineness of the invoices and the appellant's modus operandi to determine if Revenue was prejudiced.3. The third issue pertained to the scrap generated by the job-worker without supporting duty documents, leading to a dismissal of the appeal on this count due to lack of clarity in the records.4. The final issue revolved around the levy of duty on goods claimed to be destroyed during manufacture. Upon examination, no merit was found in this claim, resulting in the dismissal of the appeal on this count as well.5. The appellant requested the adjudicating authority to consider the penalty aspect based on the findings of the remand. The authority was directed to examine the gravity of the matter and pass an appropriate order, with penalty being leviable on the sustained duty demand and interest on unpaid duty.6. The appeal was remanded for re-adjudication on one specific count, emphasizing the need for an expeditious resolution due to the prolonged pendency of nearly 11 years in the Tribunal.