2017 (7) TMI 328 - AT - Central Excise

Tribunal overturns penalty, grants appellant benefits after finding procedural irregularities

M/s P.K. Singhal, Manager Finance, Excise & Taxation Versus Commissioner of Central Excise, Ghaziabad

The Tribunal allowed the appeal, setting aside the impugned order-in-original due to various procedural irregularities and lack of substantiation in the ... Penalty u/r 209A of CER, 1944 - CENVAT credit - Held that: - there being no suppression of facts and/or contumacy conduct on the part of the appellant, the penalty is set aside - the appellant is entitled to take back the CENVAT Credit debited in their register by way of pre deposit during the pendency of this appeal with interest, as per Rules - penalty set aside - appeal allowed - decided in favor of appellant. Issues:1. Appeal against Order-in-Original No. 44-45/Commissioner/GZB/2010-112. Early hearing requested based on disposal of a related appeal3. Vagueness and lack of substantiation in show cause notice4. Failure to provide copies of invoices for comments5. Failure to ensure presence of revenue witnesses6. Violation of provisions of Section 9D of the Central Excise Act7. Statements of involved parties found vague and unsubstantiated8. Contradictory statements by witnesses9. Lack of adverse inference from certain statements10. Allegations of family concern without supporting evidence11. Success in Writ application before the High Court12. Demand based on unsubstantiated invoices13. Absence of suppression of facts or contumacy conduct14. Setting aside of the impugned order15. Penalty under Rule 209A of the Central Excise Rules, 1944Analysis:The appeal was filed against Order-in-Original No. 44-45/Commissioner/GZB/2010-11 by the appellant, seeking early hearing based on the disposal of a related appeal involving M/s Rathi Industries Ltd. The Tribunal noted the vagueness and lack of substantiation in the show cause notice, specifically regarding the source of numerous invoices not disclosed to the appellant for comments. It was highlighted that the Commissioner failed to ensure the presence of revenue witnesses and violated Section 9D of the Central Excise Act, leading to a flawed order. The Tribunal found statements of involved parties to be vague and unsubstantiated, with contradictions and lack of adverse inference from certain statements. Allegations of family concern were deemed unsupported, and the appellant's success in a Writ application before the High Court was acknowledged. The demand was based on unsubstantiated invoices, with no suppression of facts or contumacy conduct found, leading to the setting aside of the impugned order.In consideration of the findings in the related appeal, the penalty imposed on the appellant under Rule 209A of the Central Excise Rules, 1944, was deemed unsustainable and subsequently set aside. The appellant was granted entitlement to consequential benefits in accordance with the law. The Tribunal allowed the appeal, emphasizing the appellant's right to take back the Cenvat Credit debited during the appeal's pendency, along with interest as per Rules. The penalty under Rule 209A of the Central Excise Rules, 1944, was ultimately set aside, ensuring the appellant's entitlement to any consequential benefits in line with legal provisions.