PHOOL PRAKASH Vs. UNION OF INDIA

JUDGEMENT

(1.) THE present bail application has been filed by the applicant in Case Crime No. 1 of 2009 under Section 9 of Central Excise Act Po ­lice Station Commissionerate -II Meerut with a prayer that he may be admitted to bail.

(2.) THE prosecution unfolded the case in its application for judicial remand of the applicant on 21 -4 -2009 when he was pro ­duced; before the Special Chief Judicial Magistrate Meerut and the same was numbered as case crime No. 1 of 2009.

(3.) THE applicant being Managing Di ­rector of M/s H.M.A.P.P. Ltd. fraudulently availed CENVAT credit amounting to Rs, 76,08,939 on the strength of bogus in ­voices of "Inputs". During investigation, it was found that no such goods were re ­ceived by M/s. H.M.A. P.P.Ltd. Chandausi. CENVAT credit was used for payment of duty on the clearance of its finished goods for export/home clearance. On account of fraudulent availment of CENVAT credit in the above manner and by clearing the finished goods on payment of duty out of such CENVAT credit, the said Firm had infringed the provisions of Rule 3,4,9 and 12 of the CENVAT Credit Rules 2004 and Rules 4,6,8,10, and 12 of the Central Excise Rules 2002. The aforesaid firm is alleged to have claimed rebate and received a sum of Rs. 79,56,543 from Meerut Commissionerate -II Meerut. The payment of duty on the fin ­ished goods exported by H.M.A.P.P. Ltd. out of the fraudulently availed CENVAT credit and claiming rebate thereon is against the provisions of Rule 18 of the Central Excise Rules. During investiga ­tion it has also come in light that during the period from September 2005 to March 2006 M/s. HMAPPL has shown the pro ­curement of inputs from M/s Vaishno In ­ternational Gangyal Jammu which is also alleged to be run by the son of applicant Sri B.K. Varshney who is Director in M/s. H.M.A.P.P.L. On the purchase so shown by HMAPPL, the applicant and other per ­sons have fraudulently availed CENVAT credit amounting to Rs. 54,13,266. Dur ­ing investigation, it came into light that during the period May 2005 to July 2005, M/s. HMAPPL has again fraudulently availed CENVAT Credit amounting to Rs. 10,54,305 on the basis of two invoices issued by M/s. S.B. Aromatics Bari Brahamna Jammu against which no such goods have been received by them. Some purchases were also made from 1 -8 -2005 to 31 -3 -2006 M/s Vaishno International had shown the purchase of 31 consign ­ments of raw material i.e. Mentha Oil, spear mint oil, and pepreta oil either di ­rectly from the farmers of Chandausi, Sambhal, Baduan and Bareilly through Kishan Kharid Patra or from M/s. Sachin and Nitin Enterprises and M/s. Rapti Com ­mission Agency both belonging to Dis ­trict Barabanki. On verification of Kishan Kharid Patra in the respective villages it was also found that the details of all ven ­dors mentioned in the Kishan Kharid Patra were fake and bogus. Even the transport of Mentha Oil from Chandausi to Jammu whose purchase was already found to be forged and fictitious on the basis of ran ­dom verification was fabricated. During the investigation, the officers of Excise De ­partment seized Menthol, Peppermint Oil and Thymol in the premises of M/s Siddhar Enterprises situate at M/s Sandeep Warehousing Corporation, Bhiwandi and the applicant has surreptitiously removed the seized goods from their factory pre ­mises at Chandausi. In that case, it was found that HMAPPIL had evaded duty of Central Exercise to the tune of Rs. 25,38,830 by way of clandestine removal of parallel invoices during the period 2003 -04,2004 -2005 and 2005 -2006. It was fur ­ther found that M/s HMAPPL had availed CENVAT credit on the bogus invoices is ­sued by Jammu based suppliers. It also revealed during investigation that from 1 -4 -2006 to November 2008, the applicant and others had availed a credit of Rs. 8,58,11,189.00 on the inputs received from Jammu based units on 168 invoices/consignments therefore, it has contra ­vened the provisions of CENVAT credit rules 2004 in relation to credit of duty al ­lowed to be utilized, towards payment of excise duty on final products which amounts to an offence under Section 9(1) (bbbb) of the Central Excise Act. Further evading payment of duty payable under the Central Excise Act, 1944 is an offence un ­der Section 9 (1) (b)of the Act and removal of the excisable goods is in contravention of provisions of Central Excise Act and the Rules made thereunder is an offence un ­der Section 9(1) (bb) of the said Act.