2012 (6) TMI 783 - AT - Central Excise

CENVAT credit - forged invoices - the goods covered under the invoices were allegedly not supplied but some other scrap was supplied - appellant argues that the alleged offence is covered u/r 26(2)(i) but the said provision was introduced in the law only on 1.3.2007 and was not in existence at the material period during March 2005 to November 2006 - Held that - the appellants are directed to predeposit 10% of the penalty amounts in each case within four weeks from today and report compliance on 20.7.2012 - appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Predeposit of penalty amount by co-noticees.
2. Applicability of Rule 26(2)(i) and Rule 25 for penalty imposition.

Analysis:
1. The appeals in question arose from an impugned order related to M/s. Ellen Industries, where a predeposit of 50% of the duty amount was ordered. The co-noticees, M/s. Sri Amman Steels and M/s. Sri Meenakshi Steels, faced penalties for allegedly supplying invoices leading to inadmissible credit. The counsel for M/s. Sri Amman Steels argued that the alleged offence falls under Rule 26(2)(i), introduced post the relevant period of March 2005 to November 2006. He contended that Rule 25, inapplicable here, should not be used for penalties. Despite various contentions, M/s. Sri Amman Steels volunteered to predeposit 10% of the penalty amount within four weeks.

2. Regarding M/s. Sri Meenakshi Steels, an adjournment request was made, but it was denied due to a similar connected appeal with identical issues. The tribunal, after considering the submissions, directed both appellants to predeposit 10% of the penalty amounts within four weeks and report compliance by a specified date. Compliance with this directive would waive the predeposit of the balance amounts during the appeal proceedings. The judgment was dictated and pronounced in open court by the tribunal.