False invoice penalty requires proof of wilful non-supply and intent; vehicle-particular discrepancies alone were insufficient.

Penalty under Rule 173Q(1)(bbb) of the erstwhile Central Excise Rules, 1944 was held unsustainable where the department relied mainly on discrepancies in vehicle particulars to allege issuance of modvatable invoices without supply of goods. The Tribunal noted that the record contained no admission by the supplier, recipient, or appellant that goods were not supplied, and the authorised signatory's statement explained the invoicing and local movement of goods. Mere doubt or inconsistency in transport details was insufficient to prove wilful issuance of false invoices or intent to enable wrongful credit. The penal order was therefore set aside.

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Issues: Whether penalty under Rule 173Q(1)(bbb) of the erstwhile Central Excise Rules, 1944 was sustainable for alleged issuance of modvatable invoices without supplying goods.

Analysis: The statement of the authorised signatory explained the manner of invoicing, dispatch, and local transportation, including cases where vehicle numbers were noted as intimated by drivers and where goods were moved locally without GRs or bilties. The record did not contain any statement from the supplier, recipient, or the appellant admitting that the goods were not supplied. The material relied upon by the department showed discrepancies in vehicle particulars, but the Tribunal found that this, by itself, did not establish that the appellant had willfully issued invoices without supplying excisable goods or had acted with intent to enable wrongful availment of duty credit. The authority distinguished the relied-upon contrary precedent on facts.

Conclusion: Penalty was not justified and was set aside in favour of the appellant.

Final Conclusion: The appellant was not found to have intentionally issued false invoices to facilitate wrongful credit, so the penal order could not stand.

Ratio Decidendi: Mere discrepancy or doubt regarding vehicle particulars in invoices is insufficient to impose penalty unless willful issuance of invoices without supply of goods and the requisite intent are proved by reliable evidence.

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