Sawalka Auto Indus. (P) Ltd. Vs. Commissioner of C. Ex., Kolkata-i - Court Judgment

Excerpt:
1. after dispensing with the condition of pre-deposit of penalty amount of rs. 26,814/- (rupees twenty-six thousand eight hundred fourteen) i take up the appeal itself with the consent of both the sides. the said penalty has been imposed upon the appellant on the ground that they have taken the modvat credit on the basis of the fake invoices issued by m/s. vi-kas steel traders, who was a regd. dealer and as a result of investigations conducted by dgae, it was revealed that m/s. vikas steels were issuing fake invoices. the appellant, on being approached by the revenue authorities, debited the modvat credit availed on the basis of invoices issued by the said dealer, but submitted that they were not having any knowledge about the fake issuance of the invoice and the dealings with the said dealer were through intermediary. the lower authorities, while confirming the payment of credit by the appellant also imposed personal penalty upon him.2. the contention of shri s.n.s. mohapatra, ld. advocate appearing for the appellant is that there was no mala fide on the part of the appellant and there is no finding to that effect by the lower authorities. they had availed the credit on the basis of the invoices issued by the said dealer, which invoice was also produced before the superintendent and was defaced by him. it is only as a result of investigations they came to know about the fake nature of the invoice.in these circumstances penalty should not have been imposed upon the appellant. ld. advocate also relies upon the tribunal's order no.a-802/kol/2001, dated 31-8-2001 vide which penalty under identical circumstances was set aside.3. shri t.k. kar. ld. sdr appears on behalf of the revenue and reiterates the reasoning of the authorities below for imposition of personal penalty upon the appellant.4. after giving my careful consideration to the submissions made from both the sides i find that there is no clear finding by the authorities below on record that the appellants was also involved in the wrong availment of modvat credit on the basis of the fake invoices issued by the dealer. they had produced the invoice to the superintendent for defacement and on being approached by the revenue had readily debited the amount in question. in this view of the matter i am of the opinion that penalty should not have been imposed upon the appellant.accordingly i set aside the imposition of personal penalty upon the appellant and allow the appeal with consequential relief to them.

Judgment:
1. After dispensing with the condition of pre-deposit of penalty amount of Rs. 26,814/- (Rupees twenty-six thousand eight hundred fourteen) I take up the appeal itself with the consent of both the sides. The said penalty has been imposed upon the appellant on the ground that they have taken the Modvat credit on the basis of the fake invoices issued by M/s. Vi-kas Steel Traders, who was a regd. dealer and as a result of investigations conducted by DGAE, it was revealed that M/s. Vikas Steels were issuing fake invoices. The appellant, on being approached by the Revenue authorities, debited the Modvat credit availed on the basis of invoices issued by the said dealer, but submitted that they were not having any knowledge about the fake issuance of the invoice and the dealings with the said dealer were through intermediary. The lower authorities, while confirming the payment of credit by the appellant also imposed personal penalty upon him.

2. The contention of Shri S.N.S. Mohapatra, ld. Advocate appearing for the appellant is that there was no mala fide on the part of the appellant and there is no finding to that effect by the lower authorities. They had availed the credit on the basis of the invoices issued by the said dealer, which invoice was also produced before the Superintendent and was defaced by him. It is only as a result of investigations they came to know about the fake nature of the invoice.

In these circumstances penalty should not have been imposed upon the appellant. Ld. Advocate also relies upon the Tribunal's Order No.A-802/KOL/2001, dated 31-8-2001 vide which penalty under identical circumstances was set aside.

3. Shri T.K. Kar. ld. SDR appears on behalf of the Revenue and reiterates the reasoning of the authorities below for imposition of personal penalty upon the appellant.

4. After giving my careful consideration to the submissions made from both the sides I find that there is no clear finding by the authorities below on record that the appellants was also involved in the wrong availment of Modvat credit on the basis of the fake invoices issued by the dealer. They had produced the invoice to the Superintendent for defacement and on being approached by the Revenue had readily debited the amount in question. In this view of the matter I am of the opinion that penalty should not have been imposed upon the appellant.

Accordingly I set aside the imposition of personal penalty upon the appellant and allow the appeal with consequential relief to them.