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2016 (8) TMI 115 - CESTAT CHANDIGARH

2016 (8) TMI 115 - CESTAT CHANDIGARH - TMI - Levy of penalty under Rule 25 of CER, 2002 issuing invoices without accompanying the goods whether penalties under Rule 25 of Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 can be impose on the person who has not dealt with the excisable goods or not? Held that:- appellant not dealt with the excisable goods at all. The penalties on the appellant under Rule 25 of the Central Excise rules, 2002 read with section .....

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of the case are that an investigation was conducted and it was alleged that during the impugned period the appellant has issued invoices without accompaning the goods, in that circumstances, the receiver of goods are not entitled to take cenvat credit, therefore, the proceedings were initiated against the appellant as well against the persons on whom the invoices were issued by the appellant. The matters were adjudicated. Demand of duty was confirmed by denying cevnat credit to the buyers alongw .....

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to 01.03.2007, there was no provisions to impose penalty merely, on the allegation that the assessee has issued invoice without supplying the goods. As appellant has not dealt with any excisable goods, therefore, provisions of Rule 25 of the Central Excise Rules, 2002 are not applicable to the facts of this case. To support this contention, he relied on the decision of the Hon'ble High Court of Punjab and Haryana in the case of Mini Steel Traders reported in 2014 (309) ELT 404 (P&H). 5. .....

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7. After hearing of both the sides, I find that the core issue is that in the facts and circumstances of the case whether penalties under Rule 25 of Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 can be impose on the person who has not dealt with the excisable goods or not? 8. The said issue came before the Hon'ble High Court of Punjab and Haryana in the case of Mini Enterprises (supra) wherein Hon'ble High Court examined the issue and observed as under .....

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esent case, the aforesaid judgment does not advance the case of the revenue. However, the Commissioner (Appeals) and the Tribunal on facts deleted the penalty. The findings of the Commissioner (Appeals) while deleting the penalty read thus : 14. I have gone through the relevant provisions of the law. The fact is that exisable goods were never manufactured. Rule 25(1)(b) of the Cenvat Credit Rules, 2002 provides penalty for non-accountal of excisable goods, liable to confiscation, produced o .....

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rovisions for facilitating others in taking credit or issuance of invoices without actual supply of material has been inserted w.e.f 1-3-2007 by inserting sub Rule (2) to Rule 26 of the Central Excise Rules with the issue of Notification No. 8/2007-C.E. (N.T.), dated 1-3-2007. Thus during the relevant period there was no legal provisions for imposition of penalty for such offences. Therefore, penalties imposed upon the appellant Nos. 1, 2, 3, 5, 7, 8, 10, 11 and 17 do not sustain and are set asi .....

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ween the said manufacturer and the respondents-dealers, are only paper transactions without actual movement of goods. On these grounds, the original authority held that the concerned manufacturers of final products who have taken Cenvat credit based on invoices, are not eligible for Cenvat credit and also imposed penalties on them. The order of the original authority was upheld by the Commissioner (Appeals). Of course there is no appeal by any of the said manufactures of final products before me .....

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ds were held liable for confiscation. In the present case, as there are no goods, question of rendering any goods liable for confiscation does not arise. By Notification No. 8/2000, dated 1-3-2007 issue of such invoices without supply of the goods also attract penal provisions. Prior to that, there is no provision for imposing penalty for merely dealing with the invoices. This may attract penal action under other Acts. The Hon ble High Court in the case of CCE, Chandigarh v. Ashish Gupta conside .....

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