Dolphin Metals I Ltd Vs C.C.E. (CESTAT Ahmedabad)
The brief facts of the case are that based on the intelligence, an investigation was undertaken against M/s Nisha Industries which revealed that the appellant had wrongly availed CENVAT credit on invoices without actual receipt of inputs; that the finished goods were found at both the manufacturing and dealer’s premises which were not accounted for; that the finished goods were also removed without payment of duty. The appellant herein is one of the suppliers of the said Cenvatable inputs on which M/s Nisha Industries had availed Cenvat Credit allegedly without actual receipt of goods.
The entire case was made out on the basis of the vehicles which were shown to have transported the goods were not capable to transport such bulky goods. The appellant’s defense on this is that there is a clerical error in mentioning the vehicle no.; that instead of GJ 2V 5889, dispatch clerk wrote the vehicle no. as GJ 2Y 5889. Similarly instead of GJ 18U 1999, it should be GJ 8U 1999. I find that there is no corroboration to this submission of the appellant that whether the goods were transported through the vehicle claimed by them. Therefore, this defense of the appellant is of no help to them. It is also a fact on record that M/s Nisha Industries who had availed the Cenvat Credit against the demand of Cenvat Credit amount, they had opted for the Sabka Vishwas (Legacy & Dispute Resolution) Scheme, 2019. Though the opting of SVLDRS should not have any bearing on the other cases who are contesting before this Tribunal but it shows that M/s Nisha Industries has accepted the demand of fraudulent Cenvat Credit. Accordingly, the appellant is liable for penalty under Rule 26 (2) for wrongly passing of the credit. However, penalty imposed is maximum amount which is provided in the Rule 26 (2) (ii). Considering overall facts and circumstances of the case, I am of the view that the appellant deserve some leniency on the quantum of penalty. Accordingly, I reduce the penalty from Rs. 12,94,547/- to Rs. 5,00,000/-.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that based on the intelligence, an investigation was undertaken against M/s Nisha Industries which revealed that the appellant had wrongly availed CENVAT credit on invoices without actual receipt of inputs; that the finished goods were found at both the manufacturing and dealer’s premises which were not accounted for; that the finished goods were also removed without payment of duty. The appellant herein is one of the suppliers of the said Cenvatable inputs on which M/s Nisha Industries had availed Cenvat Credit allegedly without actual receipt of goods. A show cause notice was issued to M/s Nisha Industries along with other noticees including the present appellant wherein it was alleged:
- that the appellant had supplied goods to M/s Nisha Industries vide invoices no. 68 and 90; that only invoices were provided to M/s. Nisha and the goods were not accompanying the said invoices;
- that in respect of invoice no. 68, the vehicle is a loading rickshaw & is therefore incapable of carrying the 16,975 kgs of goods stated in the invoice to have been supplied to M/s Nisha;
- the owner of the vehicle mentioned in the invoice no. 68 in his statement deposed that his vehicle was never used to transport the said goods; that he had never heard the name of the appellant; he further stated that his vehicle’s capacity is only of 500 kgs;
- that the vehicle no. mentioned in invoice no. 90 is a maxi/taxi as per the RTO report which is incapable of carrying 16,350 kgs stated to have been transported through the said vehicle.
- the Director of the appellant on being shown the evidence failed to offer any reasoning for the discrepancy. he vaguely stated that the goods may have been sent later on and that the vehicle number may have been wrongly mentioned in the invoice.
The said Show Cause Notice in addition to proposing the demand of wrongly availing of Cenvat Credit from M/s Nisha Industries, also proposed penalty on the appellant. The adjudicating authority vide order dated 07.03.2011 imposed penalty of Rs. 12.96 lacs under Rule 26(2) of the Central Excise Rules, 2002 on the appellant. Being aggrieved by the Order in Original, the appellant filed an appeal before Learned Commissioner (Appeals) who vide his impugned Order in Appeal upheld the penalty. Therefore, the appellant filed the present appeal. As regard the case of M//s Nisha Industries though they had filed an appeal before this Tribunal but they had opted for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and accordingly, their appeal has been dismissed as withdrawn.
2. Shri Rohit Lalwani, learned Counsel appearing on behalf of the appellant submits that the appellant had supplied the goods to M/s Nisha Industries under the cover of their following invoices:
