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2012 (11) TMI 1018 - AT - Central ExcisePenalty under Rule 26 of the Central Excise Rules 2002 - Irregular CENVAT Credit availed - Held that:- M/s Aditya Steel Rolling Pvt. Ltd. who issued invoices without supply of scrap (input) to M/s Usha Enterprises and it was the latter who issued invoices without supply of the material to M/s Ashok Iron Works Pvt. Ltd. This case of the department is based on confessional statements of the said parties and the same was noted by this Bench in the above final order. The assessee (M/s Ashok Iron Works Pvt. Ltd.) did not controvert the statements of M/s Aditya Steel Rolling Pvt. Ltd. and M/s Usha Enterprises. I find that they have offered to reverse the CENVAT credit in question and they did so. On these facts, the collusion between the assesseee on the one hand and M/s Aditya Steel Rolling Pvt. Ltd. and M/s Usha Enterprises on the other is fairly clear. The penalties imposed on them under Rule 26 are sustainable in principle. Assessee did claim CENVAT credit on the strength of invoices issued by M/s Usha Enterprises who gave the statement that they had not supplied any materials under cover of the invoices. Moreover, the assessee voluntarily reversed the irregularly availed CENVAT credit. The assesee’s conduct did not in any way conflict with the statements given by the parties who issued invoices. In the circumstances, the aforesaid plea contained in the written submissions cannot be accepted. The penal liability for issuing statutory invoices without supply of goods was recognized by the legislature as early as in 2007 vide sub-rule 2 of Rule 26 of the Central Excise Rules 2002. In the facts and circumstances of this case, the appellants are liable to be penalized under this provision of law. However, it appears to me that the penalty equal to the CENVAT credit in question will be harsh on each of these appellants - Therefore, penalty reduced - Decided partly in favour of assessee.
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