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2018 (7) TMI 759 - AT - Central ExciseClandestine removal - SS Flats, MS & AS Ingots/Billets - fake invoices - penalty u/r 26 (2) of CER on Director - Held that:- It is not dispute that M/s.HSAL had issued cenvatable invoices to M/s.NSPF without the corresponding goods. Also, it is fairly admitted by the appellant that the main assessee M/s.NSPF has paid duty and penalty when the supplier admitted that they had supplied the goods after procuring the same from open market. Shri Dinesh Goel was looking after day to day affairs of M/s.NSPF and all business transactions and accounts was done directly by him. It is inconceivable that with such a crucial role in the running of the company, Shri Dinesh Goel had no knowledge about fraudulent invoices without supply of the goods mentioned therein - Besides, the clear-cut admission by M/s.HSAL leaves no doubt that M/s.NSPF had engaged in commission of fraudulent availment of Cenvat credit. Penalty u/s 26(2) of CER on Director - Held that:- The issue of imposition of penalty under Rule 26 (2) prior to 1.3.2007 was examined by Hon’ble Punjab and High Court in the case of V.K.Enterprises [2011 (3) TMI 133 - PUNJAB AND HARYANA HIGH COURT] and ratio of the said judgment is applicable to the present case - In the said case, while upholding penalty on dealer for issuing invoices while not delivering the goods for the period prior to 1.3.2007, the Hon’ble High Court held that the person who receives the invoices without the receipt of goods mentioned in those invoices and avails Cenvat credit of the duty paid on goods mentioned in the purported invoices, without receiving the duty paid goods, is liable to pay penalty as he has taken credit in respect of goods which have been rendered liable to confiscation by their clandestine diversion - the penalty under Rule 26 is imposable on the Director for his role - however, the quantum of penalty is reduced. Appeal allowed in part.
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