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2022 (6) TMI 774 - Central Excise
Head Note / Extract:
Levy of penalty u/r 26 - Personal penalty for abatement in evasion of duty - evasions of huge amount of Central Excise Duty by fraudulent availment of Cenvat Credit - fake and forged central excise invoices - non-existent goods - main contention of the appellants were that no goods were handled by the Appellants - HELD THAT:- Rule 26 of the Central Excise Rules are applicable to any person who acquires possession of or in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation. It is noticed that in the present matter Shreeji Aluminium have shown the sale of goods to M/s G.K. Founders Pvt. Ltd. without actual delivery of the goods, the transporter in his statement also admitted the said facts. Further, during the course of investigation Shri Paresh Babubhai Patel, Director of M/s Shreeji Aluminium Pvt. Ltd. admitted the facts that invoices were prepared and issued in favour of M/s G.K. Founders Pvt. Ltd. without actual delivery of goods to M/s. G.K. Founders Pvt. Ltd. The person who proposed to sell the goods cannot say that he was not a person concerned with selling of goods and merely issued the invoices. Another submission of the learned counsel was that the show cause notice or the impugned order does not propose confiscation of the goods or held liable to confiscation of such goods, this position cannot be appreciated. Appellants were concerned with such cenvatable invoices wherein they shown the clearance of goods without delivery and were in the knowledge that such goods are liable to confiscation. Thus, under the facts and circumstances, the penalty imposed on them is correct. Hon’ble High Court of Gujarat in the case of SANJAY VIMALBHAI DEORA VERSUS CESTAT [2014 (11) TMI 620 - GUJARAT HIGH COURT], has held that a person would render himself liable for penalty for indulging in activities mentioned in Rule26 of the Central Excise Rules, 2002, even if goods are not confiscated or had not been rendered liable for confiscation. Further the contention of the appellant that penalty under Rule 26 cannot be invoked on company is also not tenable - Hon’ble Supreme Court in the case of MADHUMILAN SYNTEX LTD & ORS VERSUS UNION OF INDIA & ANR [2007 (3) TMI 670 - SUPREME COURT] held that the company is not a natural person but legal’ or ‘juristic’ person, cannot be ordered to suffer imprisonment, other consequences but would ensue e.g., payment of fine, etc. Role of M/s Steel & Metal, trading firm - HELD THAT:- The said trading firm have played a crucial role in the commission of the offence by M/s G.K. Founders. Appellant were concerned with such cenvatable invoices wherein they shown the clearance of goods without delivery and were in the knowledge that such goods are liable to confiscation. Revenue has been able to prove that the appellants were engaged in the activity of issuance of invoices without movement of the goods. Further, a plain reading of Rule26 indicates that imposition of the penalty therein is not tied to a condition that excisable goods have to be placed under confiscation under the Act/Rules - Only, the person implicated/concerned should have the knowledge of “possible confiscation” of the impugned goods. From the facts on record, the appellant have played crucial role in commission of offence by M/s G.K. Founder. Appellant is liable to penalty under Rule 26 of the Central Excise Rules. Appellant M/s B.S. Roadways and Shri Saleem Saheb Patel, transporter - fictitious LRs without actual delivery of goods - HELD THAT:- There are no reason to set aside such a reasoned orders for the imposition of penalty. However, imposing penalty on M/s. B.S Roadways as well as a separate penalty on Proprietor Shri Saleem Saheb Patel, the submission is agreed upon and it is held that the proprietary concern is not a different legal entity from the proprietor. The separate penalty imposed on Shri Saleem Saheb Patel proprietor of M/s B.S. Roadways is set aside. Appeal allowed in part.