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2023 (7) TMI 255 - AT - Central ExciseLevy of penalty u/r 26 of Central Excise Rules, 2002 - issuing Cenvat Credit invoices without supplying the goods for fraudulent passing of Cenvat credit - no proper cross examination was conducted by the Adjudicating Authority - principles of natural justice - HELD THAT:- Both the appellant have given inculpatory statements. The Adjudicating authority has conducted the cross-examination though some discrepancy was raised by the Learned Chartered Accountant during the hearing before the Adjudication authority but the fact that the cross examination has been conducted and nothing contrary to the statement given under Section 14 of the Central Excise Act, 1994 by the present appellants have come on record. Therefore, both the present appellants have direct involvement in passing of fraudulent Cenvat credit to M/s Nakoda Alloys Pvt. Ltd. The penalty was imposed under Rule 26(2) of Central Excise Rules, 2002 which has come into force with effect from 01.04.2007. Therefore, for all the transactions made prior to 01.04.2007 the Penal Provision Rule 26(2) cannot be applied retrospectively. Therefore, in respect of the transactions only made after 01.04.2007 the penalty under Rule 26(2) of Central Excise Rules, 2002 shall be applicable. In this case no penalty can be imposed under Rule 26(2) of Central Excise Rules, 2002. As regard the appeal of M/s Goodluck Empire some of the transactions were made after 01.04.2007, in respect of these transactions the appellants are liable to penalty under Rule 26(2) of Central Excise Rules, 2002. The penalty of M/s. Goodluck Empire is reduced from Rs. 8,20,000/- to Rs. 2,00,000/- - Appeal allowed in part.
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