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2016 (11) TMI 473 - AT - Central ExciseImposition of penalty u/r 25, 26 and 27 read with Section 11AC - forged invoices - issue of invoices without supply of material - Held that: - the penalty has been imposed under Rule 25 read with Section 11AC without determination of duty which is not permissible in law. As in this case no duty was determined as per the provisions of Section 11A(10) which is required to be determined if penalty under Section 11AC is to be imposed. Further, I also find that the Revenue has not investigated the case properly and no evidence has been brought on record which can prove the allegation that the appellant was issuing cenvatable invoices without the supply of material. The present case is not a case of non-payment, short-payment or non-levy or short-levy of duty, therefore the imposition of penalty under Rule 25 read with Section 11AC of Central Excise Act is not warranted. No doubt Shri A. P. Venkateshwaran who is the Director of Finance and Accounts has admitted in his statement that there is mixing of various grades and also admitted the shortage of quantity but has stated that the same was not with intent to evade payment of duty. Therefore, keeping in view the facts, I am of the opinion that the imposition of penalty under Rule 25 read with Section 11AC is not imposable in the absence of determination of duty. Therefore I set aside the penalty under Rule 25. Since the Director has admitted that they have not maintained the record properly and there is inter mixing of material of one grade with another grade and they have not been able to establish one to one correlation of the invoices and this shows that they have not maintained proper statutory records and therefore they are liable to be penalised under Rule 27 instead of Rule 25 & 26. Therefore, I impose penalty of ₹ 5,000/- each on both the appellant under Rule 27 and set aside the penalty imposed under Rule 25 on the appellant No.1 i.e. Tulsyan NEC Ltd. and under Rule 26 on A.P. Venkateshwaran, Director, therefore both the appeals are disposed of accordingly.
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