TMI Blog2015 (4) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... a Bright Steels Pvt. Ltd. was known to the Department and the Department at that time was accepting the service tax from them. In view of this, just because subsequently the Department takes the view that the activity of M/s Juneja Bright Steels Pvt. Ltd amounts to manufacture and the bright wire rods manufactured by them would attract Central Excise duty, M/s Sundram Fasteners Ltd. cannot be accused of receiving the wire rods with knowledge that the same were non-duty paid and liable for confiscation. - prima facie view that the imposition of penalty on M/s Sundram Fasteners Ltd. under Rule 26 (1) is not sustainable and as such they have strong prima facie case in their favour. The requirement of pre-deposit of penalty by M/s Sundram Faste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Service) and that bright wire rods manufactured by them would attract Central Excise duty in terms of Chapter note of Section XV. It is on this basis that the Additional Commissioner vide order-in-original dated 09/11/13 confirmed duty demand of ₹ 10,13,086/- against M/s Juneja Bright Steels Pvt. Ltd. under proviso to Section 11A (1) of Central Excise Act, 1944 for the period from 30th june 2008 to 11/1/10 alongwith interest thereon under Section 11AA and beside this, imposed penalty of equal amount on M/s Juneja Bright Steels Pvt. Ltd. and also penalty of ₹ 5,00,000/- on M/s Sundram Fasteners Ltd. under Rule 26 (1) of Cenvat Credit Rules, 2002. On appeals being filed to Commissioner (Appeals) against this order, the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f M/s Juneja Bright Steels Pvt. Ltd. amounts to manufacture and they would be liable to Central Excise Duty, M/s Sundram Fasteners Ltd. who received the bright wire rods from M/s Juneja Bright Steels Pvt. Ltd. cannot be accused of receiving knowingly the duty paid goods liable to confiscation and no penalty can be imposed on them, that there is no evidence produced by the Department to show that M/s Juneja Bright Steels Pvt. Ltd. deliberately evaded the duty and M/s Sundram Fasteners Ltd. received the bright wire rods while having knowledge that the same had been cleared without payment of duty and are liable for confiscation, that penalty of ₹ 5,00,000/- imposed on M/s Sundram Fasteners Ltd. is without any basis, that the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving the wire rods with knowledge that the same were non-duty paid and liable for confiscation. For imposition of penalty on a person under Rule 26 (1), it is necessary to prove that person had received or was involved in transportation or in concealing or in any other manner dealing with excisable goods in respect of which he had knowledge that the same are liable for confiscation for contravention of the provisions of Central Excise Act, 1944 or of the rule made thereunder. In this case, there is no such evidence. In view of this, we are of prima facie view that the imposition of penalty on M/s Sundram Fasteners Ltd. under Rule 26 (1) is not sustainable and as such they have strong prima facie case in their favour. The requirement of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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