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2016 (4) TMI 979 - PUNJAB AND HARYANA HIGH COURT

2016 (4) TMI 979 - PUNJAB AND HARYANA HIGH COURT - 2016 (336) E.L.T. 281 (P & H) - Imposition of penalty equivalent to the amount of credit passed - Purchase of only invoices from the manufacturer without actually buying inputs - Credit was sought to be passed on without invoices being accompanied by the goods - Held that:- it was noticed by the Tribunal that such an action is certainly a major violation of the provisions of law and being so, the question of exercise of any discretion in favour .....

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ted:- 3-3-2016 - MR. AJAY KUMAR MITTAL AND MRS. RAJ RAHUL GARG, JJ. For The Appellant : Mr. Jagmohan Bansal, Advocate For The Respondent : Mr. Sukhdev Sharma, Advocate AJAY KUMAR MITTAL, J. 1. This order shall dispose of a bunch of six appeals bearing CEA Nos. 92 to 96 and 109 of 2011 as according to the learned counsel for the parties, the issue involved in these cases is identical. For brevity, the facts are being extracted from CEA No. 95 of 2011. 2. This appeal has been preferred by the asse .....

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to impose equal amount of penalty when in identical facts, 10% of the credit availed has been imposed? (c) Whether the impugned order is perverse and contrary to the facts and evidences? 3. A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. During the year 2002-03, the appellant purchased only invoices from the manufacturer without actually buying inputs. As there was no transportation of inputs, there was no question of further sale to manufacturer .....

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ngly, a show cause notice dated 30.3.2006 was issued to the appellant for imposing penalty under Rule 25 of the Central Excise Rules, 2002 (for brevity the Rules ). The appellant filed reply to the said show cause notice. The respondent vide order dated 19.1.2009 (Annexure A-1) imposed penalty equivalent to the amount of credit passed, i.e. ₹ 7,26,885/-. Feeling aggrieved, the appellant filed an appeal along with stay application before the Tribunal. Various other dealers and brokers also .....

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submitted that it did not take cenvat credit itself and only issued invoices on the basis of which the manufacturers took the cenvat credit. It was further submitted that the appellant had got enriched only to the extent of 1 to 3% of credit passed on and, therefore, imposition of 100% of cenvat credit passed as penalty was unreasonable and harsh. It was also urged that the impugned order does not satisfy the test of being a reasoned and speaking order and was, thus, liable to be quashed. 5. On .....

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