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2018 (10) TMI 1775 - AT - Central ExciseRecovery of CENVAT credit - trading of goods - It was alleged that goods actually contained in the said truck was not as per the description mentioned in the invoices and were locally procured scrap, on which no central excise duty was paid - Invocation of Rule 14 and 26 of CER - invocation of section 119 of CEA - HELD THAT:- It is an admitted fact on record that the appellant No.1 in this case is a registered dealer, engaged in the activity of trading of goods. Invocation of Rule 14 ibid - HELD THAT:- The said rule mandates for recovery of cenvat credit and payment of interest, in the eventuality, where credit has been taken or utilized wrongly. On reading of the statutory provision, it transpires that the said rule can only be applicable for initiation of proceedings against the manufacturer or the service provider - In this case, since the appellant No.1 is neither a manufacturer of excisable goods nor a service provider, engaged in providing taxable service, the provisions of Rule 14 ibid cannot be invoked for recovery of the cenvat credit and for payment of interest. Invocation of Section 119 ibid - HELD THAT:- It is not the case of Revenue that the appellant No.1 had used any other goods to conceal the offending goods i.e. scrap. Thus, confiscation of the said goods is not proper and justified and accordingly, redemption fine cannot be imposed on the appellant. Since the goods are not liable for confiscation, the provisions of Rule 25 ibid will also not be attracted for imposition of penalty on the appellants. Applicability of the provisions of Rule 26 ibid - HELD THAT:- Such statutory provisions have correctly been invoked on the appellant No.2 for imposition of penalty inasmuch as he was instrumental in issuance of the wrong invoices to the customers, facilitating availment of ineligible cenvat benefit. However, considering the overall facts and circumstances of the case, the quantum of penalty can be reduced in the interest of justice on the appellant No.2. Accordingly, the penalty imposed on the appellant No.2 is reduced from ₹ 1,77,993/- to ₹ 50,000/-. Appeal allowed in part.
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