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TMI Blog2024 (9) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... ,51,618/- availed by the company during October 2006 to April 2007 on the following grounds:- (i) CENVAT credit of Rs.2,56,17,492/- availed on steel items like M.S. angles, channels, flats etc. on the ground that the same were used in the construction/fabrication of supporting structures of plant and machinery which were immovable structures embedded to earth. (ii) CENVAT credit of Rs.19,73,608/- availed on the basis of Central Excise invoices obtained from M/s Bhartiya Alloys & Steel Cast Pvt. Ltd., where it was alleged that the impugned goods were not physically received by the company in their factory. (iii) CENVAT credit of Rs.7,60,517/- availed on inputs which were alleged to have been used in power transmission structures which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the appellant at the outset submits that against the company there was a duty demand on the alleged wrong availment of Cenvat credit. However, neither in the show cause notice nor in the impugned order goods were proposed/ confirmed the confiscation thereof. Therefore the penalty on the director cannot be imposed. It is his submission that penalty under Rule 26 can be imposed only when the goods which was dealt by the person is liable to confiscation. Since in the present case there is no confiscation of the goods, Rule 26 cannot be invoked. 2.1 He submits that on merit of the case against the company, the Cenvat credit was admissible in view of various judgments, therefore, penalty cannot be imposed upon the appellant for suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of CGST & Central Excise Lucknow 2019 (367) ELT 836 (All.) * Tamilnadu Newsprint & (Mad.) Commissioner of Central Excise 2021 (3) TMI 179 Papers Ltd Vs * Cements Ltd. 2019 (367) ELT 817 (Mad,) The Commissioner of Central Excise Vs Madras * Dalmia Cements (Bharat) Ltd. Vs CESTAT, Chennai 2016 (341) E.L.T. 102 (Mad.) * Commr. Of C.Ex., Visakhapatnam-II Vs Sai Sahmita Storages (P) Ltd. 2011 (270) E.L.T. 33 (Α.Ρ) * SLR Steel Ltd. Vs Commissioner of C.Ex., Banglore- 2010 (249) E.L.Τ. 394 (Tri-Bang.) * Commissioner of Central Excise, Banglore-II VS SLR Steel Ltd. 2012 (280) ELT 176 (Kar.) * HNG Float Glass Ltd. v. CCE, Vadodara- 2022 (12) TMI 132 CESTAT Ahmedabad * SKF Technologies (1) Pvt. Ltd. v. CCE, Ahm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that Shri Gouri Shankar Poddar Chairman/ Managing director of the assessee company was the responsible person for all the business and financial transactions of the Company and E same were being done & managed at his direction and under his knowledge. He was fully aware and had reason to believe that credit on such items when used in construction, fence walls, eraction of foundation/concrete Road built in the factory, fabrication of sheds, support structures of shed and machines embeded to the earth, are not allowed. Thus, he is also equally responsible for such commited offence and is liable for penalty under Rule-26 of the Central excise Rules, 2002." 4.2 Rule 26 of Central Excise Rule, 2002 under which the penalty was imposed upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater.] [Inserted by Central Excise Rules, 2007 w.e.f. 1.3.2007]" 4.3 From the plain reading of the above rule 26, we find that the penalty under the said rule can be imposed either under sub- rule (1) or sub - rule (2). Sub -rule (1) deal with the act of the person such as transporting, removing, depositing, keeping , concealing, selling and purchasing, or in any other manner deals with , any excisable goods which he knows and has reason to believe are liable to confiscation under the Act or these rules. As per sub -rule 2 (i) any person who issues an excise duty invoice without delivery of the goods specified therein or ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts. This issue has been considered in catena of judgments cited by the learned counsel whereby the Cenvat credit was allowed on the material in question such as steel structure goods used for fabrication of structure of plants and machinery, therefore, though we are not deciding merit of the case but considering the facts even when the case of the company M/s. Raj Rayon Ltd is prima- facie strong in their favour, for this reason also penalty under Rule 26 is not sustainable. 4.6 As per the discussion made here in above, the department could not make out any case to impose penalty under Rule 26 on the appellant Shri Gouri Shankar Poddar, Director of M/s. Raj Rayon Ltd. 5. Accordingly, the penalty is set aside. Appeal is allowed with conse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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