Custom, Excise & Service Tax Tribunal
M/S. Nidhi Enterprises vs Cce, Delhi-Iv on 22 January, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066 COURT NO. II Central Excise appeal No. 3439/2010-SM [Arising out of Order-in-Original No. 43/ADC/Adjn/09 dated 30.11.2009 passed by the Additional Commissioner of Central Excise, Delhi-IV, Faridabad] Date of Hearing: 22nd January, 2013 Order pronounced on: 08/02/2013 M/s. Nidhi Enterprises Appellants Vs. CCE, Delhi-IV Respondent
Present for the Appellant : Shri R.P. Jindal, Consultant
Present for the Respondent : Shri B.B. Sharma, A.R.
Coram: Honble Shri D.N. Panda, Judicial Member
FINAL ORDER NO. 55517/13 Dated:22/01/2013
Per D.N. Panda
When investigation noticed that one M/s. Bhagwati Trading Co. and M/s. Ayushi Steel Co. Ltd., who were first stage dealer under Central Excise Act,1944 merely issued cenvatable invoices to the appellant a second stage dealer without supplying any goods, Revenue proceeded against the appellant to recover the revenue lost due to paper transactions made with M/s. Auto-Tech Engineers, Faridabad (manufacturer/end user) without delivery of goods. Penalty of Rs. 7,90,637/- was imposed on the appellant under Rule 25 (1) of Central Excise Rules, 2002. Investigation further noticed that invoices were merely issued by one Pasondia Steel Profiles Limited to Bhagwati Trading Co. and Ayushi Steel Co. Ltd., Faridabad without delivery of goods to them. Such fact was admitted by one Shri Yaspal Sharma, Dy. General Manager of Pasondia Steel Profiles Ltd., Ghaziabad in his statement dated 27.2.2006 and 6.3.2006 recorded under Section 14 of Central Excise Act, 1944. Similarly, Kanika Strips (P) Ltd. also did not supply goods but merely issued invoices which was admitted by Shri Rakesh Bansal, Director of the said company.
2. Investigation further revealed that deals between Pasondia Steel Profiles Limited and with Bhagwati Trading Co., Ayushi Steel Co. as well as the appellant was merely paper transactions with intent to pass on Cenvat credit to the buyers of those papers without delivery of goods. Shri Lalit Goel, Proprietor of Nidhi Enterprises which is the appellant firm confirmed that it had only received paper credit to pass on to the buyers without physical delivery of goods. This transaction resulted in no payment of excise duty except trading papers to enable the buyers of paper credit to claim Cenvat credit on the input described on the fictitious invoices.
3. Defending adjudication it was submitted by learned consultant for appellant that purchases made by the appellant as second stage dealer related to 26 invoices. 12 invoices were received by Ayushi Steel Co., one by Bhagwati Trading Co. and 13 invoices by Kanika Steel. Revenue did not find no supply of goods relating to these 26 invoices. Statements of aforesaid persons were only relied by Revenue. Neither Shri Rakesh Bansal nor Shri Rupesh Bansal named the appellant in their statements. M/s. Bhagwati Trading Co. was part of Ayushi Steel Co. and not only invoices were issued but also goods were delivered. So also goods were delivered by Kanika Steel. In absence of any evidence directly imputing the appellant to the charge adjudication was not sustainable for which penalty of Rs. 7,90,637/- is not imposable on the appellant.
4. Revenue supports adjudication and brings out that learned appellate authority in Para 7 of impugned order has brought out the case of Revenue. When fraud was detected due to mere issuance of Cenvatable invoices to the appellant without delivery of goods and the appellant in turn issued Cenvatable invoice, adjudication was made to which is not interfereable.
5. Heard both sides and perused the record.
6. It was proved case of Revenue that persons who were said to be supplier of the goods themselves admitted that they had not supplied any goods to the first stage dealer as aforesaid for delivery thereof to the appellant second stage dealer. Oral statement recorded as stated aforesaid in the course of judicial proceedings u/s 14 of the Act being a valuable piece of evidence that remained un-refuted. Appellant failed to demolish or disturb any of the imputations without leading any cogent evidence to contradict allegations of Revenue. The appellant merely issued invoices without any goods delivered to the buyer and such buyer claimed Cenvat credit causing loss to Revenue by the designed fraud as a member of the racket. Plea of supply of goods was proved to be false and transactions flowing therefrom proved to be bubbles. Appellants plea that its name did not find place in statements recorded as aforesaid is of no significance when the supplier of goods denied supply of goods to it. Accordingly, the appellant was beneficiary of the fraud perpetuated against Revenue and fraud vitiating solemn act brings the appellant to penal consequence of law. The appellant is, therefore, not entitled to enjoy any immunity from penalty. Accordingly, adjudication against the appellant remain undisturbed. Appeal is thus dismissed.
(Pronounced in the Open Court on 08/02/2013) (D.N. PANDA) JUDICIAL MEMBER RK ??
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4E/3439/2010-SM