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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2016 (12) TMI AT This

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2016 (12) TMI 907 - AT - Central Excise


Issues involved:
Whether the appellants are liable for penalty under Rule 209A of the Act.

Analysis:

1. The case involved the issuance of cenvatable invoices/certificates without supplying the material, based on alleged fake and forged gate passes for MS Scrap, leading to fraudulent modvat credit to another company. The penalty under Rule 209A of Central Excise Rules 1944 was imposed on the appellants for their involvement in the fraudulent activity.

2. The appellant's counsel argued that since no excisable goods were involved, the penalty under Rule 209A cannot be imposed. They cited judgments from the Bombay High Court and previous tribunal decisions where penalties under Rule 209A were dropped for similar cases, emphasizing that the penalty should not be applicable in the absence of dealing with excisable goods.

3. On the contrary, the Revenue's representative contended that penalties under Rule 209A should be imposed even when no goods are directly handled, as fraudulent benefits were extended through the issuance of invoices. They referred to judgments supporting the imposition of penalties under similar circumstances.

4. The Tribunal analyzed Rule 209A, stating that penalties can only be imposed when dealing with excisable goods liable for confiscation. Since no goods were involved in the present case, the appellants were not engaged in activities mentioned under Rule 209A. The Tribunal highlighted the legislative amendment in Rule 26 of Central Excise Rules 2002 to cover similar offenses, indicating that Rule 209A did not apply to cases like the present one. They also considered conflicting judgments but followed the binding decisions of the Bombay High Court and previous tribunal rulings to set aside the penalties imposed on the appellants.

5. Ultimately, the Tribunal concluded that the penalties under Rule 209A were not sustainable in the appellants' case, setting them aside and allowing the appeals. The decision was based on the interpretation of the law, previous judgments, and the absence of direct involvement with excisable goods leading to confiscation.

This comprehensive analysis of the judgment provides a detailed overview of the legal issues, arguments presented by both sides, and the Tribunal's reasoning leading to the final decision.

 

 

 

 

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