2018 (5) TMI 1754 - AT - Central Excise

Penalty u/r 26 of CER, 2002 - it was alleged that appellant has supplied the raw material to one M/s. Goyal Pipes P Ltd., who have used the same for further manufacture of their final product which stand cleared by them without payment of duty - Held that - Identical issue decided in the case of PRYASH STEEL KAMAL KUMAR AGRAWAL M/S KAILASH TRADERS VERSUS CCE & ST, RAIPUR 2018 (5) TMI 814 - CESTAT NEW DELHI , wherein the penalty was set aside by holding that there is virtually no evidence to show that such entries relate to the actual transportation and supply of the raw material to the present appellant. Penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Penalty imposed under Rule 26 of Central Excise Rules on the appellant for supplying raw material to another company without payment of duty.

In the present appeal, the challenge is to a penalty of ?50,000 imposed on the appellant, a registered dealer, under Rule 26 of Central Excise Rules. The penalty was imposed based on the appellant supplying raw material to another company, which used it for manufacturing their final product without paying duty. The allegations were made based on entries in the records of a third party. The Tribunal had previously set aside penalties in identical matters based on the same facts and circumstances. The Tribunal observed that there was no corroborative evidence to support the allegations, and there was a lack of evidence linking the entries to the actual supply of raw material to the appellant. Therefore, the penalty was set aside in line with the previous decision regarding similar cases. Consequently, the penalty imposed on the appellant was also set aside, and the appeals were allowed with any consequential relief.