2010 (1) TMI 1084 - AT - Central Excise

Summary

Issues Involved: Penalty imposed for issuing invoices without supplying goods, reliance on retracted statement, authenticity of documents, applicability of Rule 26, quantum of penalty, liability of proprietor in a firm, comparison of penalty with Cenvat credit.

Analysis:
1. Penalty Imposed for Issuing Invoices Without Supplying Goods:
The appellant was penalized for allegedly issuing invoices without supplying MS plates and round bars, enabling another entity to avail Cenvat credit. The Department contended that no goods were actually transported, and only invoices were provided. The appellant argued that the penalty was harsh and that the provision for such penalties came into effect after the alleged incident.

2. Reliance on Retracted Statement and Authenticity of Documents:
The appellants claimed that the statement implicating them was retracted promptly and should not be relied upon. They also presented entries in the RG-23-D register and bill copies to support their claim of goods transportation. They argued that without proving the authenticity of these documents as fake, the Commissioner's decision should be set aside.

3. Applicability of Rule 26:
The Original Adjudicating Authority's failure to specify the sub-rule of Rule 26 was cited as a reason to set aside the penalty. The Department argued that penalties could be imposed under Rule 26, even if the firm did not handle the goods directly, as the proprietor and the firm were considered a single entity.

4. Liability of Proprietor in a Firm:
The Department contended that penalties could be imposed on the firm, including the proprietor, under Rule 26. They cited a decision where penalties were upheld due to improper handling of goods, leading to confiscation. The argument that penalties could not be imposed when goods were not supplied but only invoiced was rejected.

5. Quantum of Penalty and Comparison with Cenvat Credit:
The appellants requested a reduction in the penalty, claiming it was excessive compared to penalties imposed on other dealers. However, the Tribunal found no basis for comparison without detailed figures and rejected the request for a penalty reduction.

In conclusion, the Tribunal upheld the penalty imposed on the appellant for issuing invoices without supplying goods. The decision was based on corroborated evidence, including statements and documentary proof. The Tribunal rejected the appellant's arguments regarding the retracted statement, authenticity of documents, and applicability of Rule 26. The liability of the proprietor in the firm was affirmed, and the plea for a penalty reduction was dismissed due to lack of comparative data. The appeal was ultimately rejected, emphasizing the importance of proper documentation and compliance with excise regulations.