2022 (7) TMI 921 - AT - Central Excise

Dismissal of Appeal Upholding Penalty for CENVAT Credit Issue

The appeal against the penalty imposed under Rule 26 of the Central Excise Rules, 2002 was dismissed. The court upheld the Order-in-Original and the ... Levy of penalty - wrongful availment of CENVAT Credit - allegation is that the appellant had abetted/aided, planned and conspired with other co-noticees in the preparation of invalid documents, resulting in the wrongful availment of CENVAT Credit - HELD THAT:- When the Revenue entertained a genuine doubt as to the wrongful availment of CENVAT Credit after verifying documents like invoices, Daily Sheets, etc., and since there were discrepancies, a Show Cause Notice was issued. When a statutory notice was issued, it was incumbent upon the appellant to at least offer an explanation to clear the doubts pointed out. The appellant, however, without bothering to do so, has only contended that the documents / evidences relied upon by the Revenue were vague, etc., despite the fact that the Revenue had also relied on his statement recorded, which is not rebutted. There is no supporting material placed on record by the appellant or even by M/s. Hitech Mineral Industries (Covai) Pvt. Ltd. other than a mere statement that the credit in question have been availed in accordance with law, to clear the doubts in the mind of the Revenue. The fact remains that M/s. Hitech Mineral Industries (Covai) Pvt. Ltd. had wrongfully availed CENVAT Credit and the appellant being “any person” who has abetted in making such documents that helped M/s. Hitech Mineral Industries (Covai) Pvt. Ltd. in availing such wrongful CENVAT Credit, cannot escape from the rigours of Rule 26 of the Central Excise Rules, 2002. There are no whisper about any retraction or any disputes as to their statements being not voluntary. The same are not even rebutted as having been obtained per force. Hence, the statements are relevant documents. The present appeal was filed in the year 2013 and the appellant had sufficient time to place all such relevant documents on record, but no such attempt is made. The appellant has only relied upon those very same invoices, Daily Sheets, material inward notes of M/s. Hitech Mineral Industries, etc., which form the very foundation for issuing the Show Cause Notice. Appeal dismissed. Issues:- Appeal against penalty imposed under Rule 26 of the Central Excise Rules, 2002.Analysis:The judgment pertains to an appeal against the penalty imposed under Rule 26 of the Central Excise Rules, 2002. The main issue for consideration was whether the penalty sustained in the impugned order was correct or not. The appeal was filed against the Order-in-Appeal passed by the Commissioner of Customs and Central Excise (Appeals), Salem. The appellant argued through their consultant, focusing on specific appellants and their roles, leading to a separate order for one of the co-noticees due to non-prosecution. The relevant facts highlighted that a Show Cause Notice was issued suspecting wrongful availment of CENVAT Credit, with discrepancies found in documents and statements obtained during the investigation.The Revenue's case was based on various invoices and documents indicating discrepancies in the scrap transactions, leading to suspicions of wrongful availment of CENVAT Credit. The appellant's defense primarily relied on the legality of the invoices and the payment of duty to a specific entity. However, the appellant failed to provide substantial evidence to counter the discrepancies pointed out by the Revenue. The Adjudicating Authority confirmed the demand and penalties against the noticees, leading to the appeal. Despite the appellant's arguments about the vagueness of the Revenue's evidence, the judgment emphasized the lack of substantial rebuttal or supporting material from the appellant to clear the doubts raised.The judgment highlighted the appellant's failure to offer a clear explanation or present relevant documents to counter the suspicions raised by the Revenue. The appellant's reliance on existing documents without addressing the discrepancies pointed out in the Show Cause Notice weakened their case. The judgment concluded that the appellant, being a party involved in facilitating the wrongful availment of CENVAT Credit, could not evade the penalty under Rule 26 of the Central Excise Rules, 2002. The lack of substantial evidence or efforts to address the doubts raised by the Revenue led to the dismissal of the appeal, upholding the Order-in-Original and the impugned Order-in-Appeal.