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2024 (3) TMI 1099 - AT - Central ExciseLevy of penalty u/r 25 of CER - Availment of fraudulent credit - issuance of Cenvatable invoices without actual dispatch of goods - Penalty on Registered Dealers - Penalty on Unregistered Dealers and Transporters - HELD THAT:- The adjudicating authority finds that the charge levelled against the respondents was that they have facilitated and abetted M/s AIPL in availing fraudulent credit; a careful consideration of type of offences indicates that that the circumstances covered fall under Rule 26(2) of Central Excise Rules, 2004 introduced w.e.f. 01.03.2007 and therefore, penalty cannot be imposed under Rule 25 of Central Excise Rules, 2004. Only for the reason that the offence relating to imposition of penalty for issuing Cenvatable invoices without supply of goods is made an offence specifically from 01.03.2007, it cannot be concluded that there was no provision in the rules for imposition of penalty for such offence before 01.03.2007. It is found that a bare reading of the provisions gives a clear understanding that even before the amendment Rule 26 provided for imposition of penalty in the cases where the dealer did not account for the excisable goods or in cases of contravention of provisions of the Act and the Rules. It cannot be said that the dealers have accounted for the rules in a proper manner and did not contravene any provisions of law - The very fact that they have issued invoices in the name of M/s AIPL facilitating them to avail Cenvat credit while they have removed the goods elsewhere is a proof in itself that they did not account for the excisable goods properly and have violated the provisions of Rule 9 of Central Excise Rules, 2004. Now, the question that comes is as to whether such non-accountal and contravention of provisions is with an intent to evade payment of duty. It is on record that the dealers are registered. They are aware of the provisions of law relating to issuance of invoices. Even then, they have issued Cenvatable invoices in the name of M/s AIPL without ensuring that the goods are also consigned to M/s AIPL. A positive act evidencing the intent to evade payment of duty is in the form of issuing Cenvatable invoices. Therefore, the dealers had contravene the provisions of rules with intent to evade payment of duty and they have rendered themselves liable to pay penalty under Rule 25 even before the insertion of sub-Section (2) under Rule 26. Coming to the case of the transporters, they have not only confirmed the fact that the goods consign to M/s AIPL were transported upto Delhi and in no case were transported to M/s AIPL. Moreover, they have issued transport document evidencing procurement of goods by M/s AIPL - the transporters have also rendered themselves liable to pay penalty under Rule 26 ibid. Even before insertion of sub-Rule 2 under Rule 26 of Cenvat credit Rules 2004, provisions existed for imposition of penalty under Rule 25 for the offence of issuing Cenvatable invoices without movement of goods. Similarly, there is a provision to impose penalty and for confirming a non-existent transportation goods under Rule 26 of Cenvat Credit Rules, 2004 - Revenue has a strong case in their favour and the impugned order cannot be sustained as far as dropping of penalty on respondent dealers/transporters - such penalty leviable on different dealers/transporters should be commensurate with the offence committed and to wipe of the benefit that has accrued to them while working as a deterrent against any such future repetition of the same. The impugned order is modified to the extent of non-imposition of penalty on the respondents - Appeal disposed off.
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