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2012 (8) TMI 826 - AT - Central ExcisePenalty under Rule 26 - Confiscation of goods - Held that:- Penalty imposed on the appellant under Rule 26 of the Central Excise Rules, 2002 is unwarranted for more than one reason. Firstly, the appellant herein in his statement before the authorities has categorically stated that he is SSI manufacturer of goods and does not avail Cenvat credit of duty paid on raw materials. It is also on record that the appellant herein had procured formaldehyde from M/s. Windson Chemical Industries only on the ground that the input supplier had quoted rates lower than the market rates. There is no dispute as to the receipts of the goods in the factory premises of the current appellant. In my considered view, if an assessee is procuring a material which is quoted lower than a market rate, it is indeed a business decision made by him to avail the benefit of lower rate of the inputs. This cannot be faulted inasmuch as there being a categorical admission of the appellant as to the receipt of the material and payments thereto made in cheque as well as in cash. In the absence of any such contrary evidence, in my considered view, the penalty imposed on the appellant is unwarranted. Secondly, I find that the show cause notice in this case seeks to impose penalty on M/s. Pragati Polymers which is a partnership firm while the adjudicating authority has imposed penalty on the current appellant Shri V.N. Patel, who is a partner of the said Pragati Polymers, in the entire show cause notice, there is no whisper or allegation as to the current appellant being put on notice that penalty is sought to be imposed on him and he should give reply for the same. In the absence of any such show cause notice to the appellant, the imposition of the penalty on the appellant is non est, as there being no show cause notice issued to the appellant as an individual - Decided in favour of assessee.
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