Upgrad LLM

urgent matter of central excise or cenvat


Dear members,

Please inform about all DEFENCES and COUNTER-ARGUMENTS that are available to an advocate who is defending a client against an allegation of evasion of Central Excise duty or CENVAT.

Few allegations related to this issue are:

(1) Unaccounted raw materials/finished goods/packing material;

(2) Non-production of documents/invoices showing purchase of excess stocks of packing material etc.;

(3) Furnishing of incorrect information in Railway Receipts during transportation (Name of the manufacturer and descripttion of finished products/packs ready for sale, were not disclosed; instead, names of various raw materials was mentioned);

(4) Hiding behind corporate veil and running companies responsible for evasion of duty.

Please inform as soon as possible.

 
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Chartered accountant

Much depends on the facts of the case. You may start from the validity of the search, if any , conducted. You may challenge the SCN etc. Pl give some details of you case.

 

siva208@yahoo.com


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Practitioner

Give some brief about ur case.


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Advocate & Indirect Tax Consultant

Our defence will be only technical points for your issues like natural justice violation, limitation for issuing show cause notice, etc. other points you have to taken from the show cause notice. You may get some good point. Infact the details given by you is vague. Therefore this much i can help u


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ADVOCATE &TAX CONSULTANT

Give more details to enable us to help your case. The allegations have to be examined in the light of the specifics raised in the SCN.


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Lawyer

Forum Moderator

Most of these cases are won on the mistakes committed by the investigating agency that would get reflected in the show cause notice even though the charge of evasion might be true. So, it is better to read the show cause notice again and again and the documents annexed to it, by which we would come to the lacunae in the charges.

 


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Advocate

The Central Excise case depends upon statement recorded by authorities, and the common feeling is that whatever has been recorded is automatically admissible in evidence. To break this, we are using Section 9D of the Central Excise Act (applicable in service tax also, Section 136B in Custom Act). Apply these sections, and you will be able to break a case relying too much on statements.


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Dear friends,

Thank you so much for your replies. They are helping me now as I am reading the 'Show Cause Notice' again & again. Broadly, the facts revolve around the 4 points stated by me earlier. Still, there is more to the story. At present, we have not received the complete set of the 'Relied Upon Documents' in the absence of which, I am not able to properly cross-check the correctness of the allegations in the notice. These documents will come soon. I'll definitely share more with all of you asap.

Large number of parties (all are our clients) have been targeted in this case and a huge amount has been demanded as a total of duty and penalty. Primarily, parties are manufacturing companies (including, few of their employees), owner of these companies (he resigned long ago; allegation of hiding behind corporate veil), so-called 'dummy' directors of these companies, the Company Secretary of these companies, raw material suppliers, suppliers of packing materials, transporters, carrying & forwarding agents, railway booking agents, distributors, dealers etc. Searches and seizures took place at places like factory premises, gates of factories, railway stations, premises of dealers etc.

At various railway stations, bags of 'branded finished goods' involved were found. On these bags and in the forwarding notes kept by the helpers, descripttion of the stuff being transported contained names of various 'raw materials' and not the 'brand' or the 'finished goods' (ready to be sold and kept inside the bags). 

Duty demanded covers the period between 2004-08. Searches & seizures took place in 2007 & 2008. Allegation against the owner of the manufacturing companies is that he was a director of these companies until 2002. After resigning in that year, he appointed few loyal employees as directors. According to the notice, statements of these 'dummy' directors indicate that the owner continued to supervise everything related to the defaulting companies. 

As was told to us by our clients (all parties) who are at the receiving end, they were under pressure (from the investigating officers) to give few adverse written statements though they tried to deny orally. To some extent, parties were asked to write few suppositions. 

Please think about all these points & revert asap.

Regards.


 
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