Providing Blank LR books establishes the abatement in passing of Fraudulent Cenvat Credit: CESTAT upholds Penalty under Rule 26 [Read Order]

Providing Blank LR books establishes the abatement in passing of Fraudulent Cenvat Credit ,the Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) upheld the penalty under Rule 26 of the Central Excise Rule ,2012.

Samir Transport Company , the appellant challenged the order in original  dated 10.07.2019 wherein demand  of alleged  fraudulent  cenvat credit   of Rs 50,81,22,157/-  was confirmed  against M/s Archon Engicon  Limited on the   ground that  M/s Accord   Industries Limited  have  issued invoices without supplying  the  inputs.

Shri Vipul Khandhar, Learned   Chartered Accountant appeared on behalf of the appellant submits  that penalty was imposed on the  appellants on the ground that  they have  facilitated  the passing of wrong availment of  cenvat  credit by giving  blank LRs  to M/s Accord   Industries Limited. It was contended that the appellants being transporters  had not issued any note  and   not  involved in transportation therefore imposition of penalty  under Rule 26 (2)  is unjustifiable. Shri G. Kirupanandan, Superintendent(AR) appeared on behalf of the Revenue supported the finding of the impugned order.

A Coram of Single-member Mr Ramesh Nair(Judicial) observed that the appellant have admittedly provided the blank LRs to M/s Accord which were used for  passing of fraudulent cenvat credit and the act of giving blank LR books itself  clearly falls under purview of Rule 26(2) of Central Excise Rules, 2012.

“Even providing blank LRs establishes the abatement in passing of fraudulent cenvat credit”, the bench held. While dismissing the appeal, the Tribunal upheld the penalty.

To Read the full text of the Order CLICK HERE

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