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2006 (1) TMI 274 - CESTAT, MUMBAIPenalty imposed upon the manufacturers along with imposition of personal penalties of varying amounts on other appellants in terms of the provisions of Rule 26 - Cenvat/Modvat on inputs - Demand - Limitation - Extended period - HELD THAT:- In the present case the manufacturers being in the knowledge of the fact that the credit was traveling only on the basis of the invoice without actual travel of the inputs is established from the statements of the various persons recorded during the course of investigation. As such, we do not find any force in the appellants plea of the demand being barred by limitation. It is further seen that in the said decision of IDL Chemicals Ltd.R [1996 (7) TMI 337 - CEGAT, CALCUTTA]. The Tribunal observed that the credit taken on the basis of the fake and non genuine duty paying documents is required to be reversed. Accordingly, we are of the opinion that the reversal of credit by M/s. AIA Engineering Pvt. Ltd. and Bhagwati Autocast Ltd. is justified. However, we find that the said reversal was made by the appellants during the course of investigation itself except by M/s. Bhagwati Autocast Ltd. Taking all these facts into account, we reduce the penalties on the said three appellants to Rs. 2 lakhs each (Rupees two lakhs only). Penalties imposed upon the other appellants under the provisions of Rule 26, we find that the appellants reliance on the Tribunal decision in the case of Ruby Impex v. Commissioner of Central Excise[2004 (7) TMI 165 - CESTAT, NEW DELHI] as appropriate. In terms of the said decision, provisions of Rule 209A cannot be invoked for imposition of penalty, when the dealers have not physically dealt with the goods and there are no goods involved which are liable to confiscation. Ld. Advocate contends that the provisions of Rule 26 of Central Excise Rules, 2002 are pari materia to Rule 209A of the erstwhile Central Excise Rules. Admittedly, there are no goods involved, which are liable to confiscation inasmuch as the Revenue’s own case is that the no inputs were supplied under the cover of the invoices. In the said scenario, the above decision of the Tribunal is fully applicable. We, accordingly set aside the penalties imposed upon the other appellants under the provisions of Rule 26 of Central Excise Rules. All the appeals disposed of in above terms.
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