Issuance of Invoices without Movement of Goods resulted in Confiscation: CESTAT upholds Penalty [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai bench has held that issuance of invoices without movement of goods resulted in the confiscation and upheld the penalty.

The department found that M/s G.K. Founders Pvt. Ltd. are indulging in evasions of a huge amount of Central Excise Duty by fraudulent availment of Cenvat Credit based on the Central Excise Invoices issued by M/s Shreeji Aluminium Pvt. Ltd. without physical receipts of the goods. The Department issued a show-cause notice demanding the Cenvat Credit along with the penalty from M/s G.K. Founders Pvt. Ltd. and penalty under Rule 26 of Central Excise Rules 2002 on all the Appellants.

Appellant M/s Shreeji Aluminium Pvt. Ltd and Shri Paresh Babubhai Patel submit that basic charges against the Appellantsare that they passed on Cenvat Credit on “non-existent‟ goods shown to have been cleared to M/s G.K. Founders Pvt. Ltd. The appellant contended that no goods were handled by the Appellants.

 It was observed that Rule 26 of the Central Excise Rules applies to any person who acquires possession of or in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner deals with any excisable goods which are liable to confiscation.

Judicial Member Mr Ramesh Nair observed that acts or omissions on the part of appellants could result in the impugned goods becoming liable for confiscation under the Act/Rules is exposed to the imposition of penalty under this rule.

The Tribunal held that imposing a penalty on M/s. B.S Roadways as well as a separate penalty on Proprietor Shri Saleem Saheb Patel is not sustainable as the proprietary concern is not a different legal entity from the proprietor and set aside the separate penalty imposed on Shri Saleem Saheb Patel proprietor of M/s B.S. Roadways. Shri Paritosh Gupta & Shri Saurabh Rachchh appeared for the Appellant and Shri Ghanshyam Soni appeared for the Respondent.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.