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2017 (3) TMI 1351 - AT - Central ExciseImposition of penalty u/r 26 of CER 2002 - penalty on bank for abetting offence - The case of the Department is that the requisite certificate issued by the Executive Head of the Project Implementing Authority is not countersigned by the Joint Secretary to the Government of India - N/N. 8/2007-CE(NT) dated 1.3.2007 - Held that - the penalty has been imposed on the appellant Bank for abetting evasion of excise duty by indulging in abetting forgery of the requisite certificate which conduct falls within the purview of Rule 26 (2) of CER 2002 which provision was inserted in the Rules vide N/N. 8/2007-CE(NT) dated 1.3.2007 - But the period in dispute in the instant matter is much prior to 1st March 2007. In any case there is nothing on record to evidence the fact that ICICI Bank has played any role in getting the forged certificate - penalty set aside - appeal allowed - decided in favor of appellant.
Issues:
Eligibility of goods for exemption from excise duty under Notification No. 108/95-CE dated 28.8.95. Analysis: The appeal under Section 35F of the Central Excise Act, 1944 concerns the order of Commissioner, Central Excise, Mumbai, imposing excise duty demand and penalties on manufacturers for goods cleared without payment of duty to M/s Balrampur Chinni Mills Ltd. under Notification No. 108/95-CE. The issue revolves around the eligibility of these goods for exemption under the said notification. The Department alleges that the certificates used for seeking exemption were forged, not bearing genuine signatures of the required authorities. ICICI Bank Ltd. is accused of involvement in issuing and sending these certificates to the Ministry of Finance, although the Finance Ministry was not the line Ministry for the project, leading to wrongful exemption claims. The Department contends that ICICI Bank was complicit in the forgery to enable BCML to evade duty. The appellant argues that ICICI Bank did not handle the excisable goods in question and that it signed the certificate as required by the notification, leaving BCML responsible for any forgery. The Bank's defense is that it acted in good faith, and if forgery occurred, it was not liable for it. The Revenue, however, supports the penalty, asserting that ICICI Bank's involvement in procuring forged certificates constitutes abetment of duty evasion, justifying the penalty under Rule 26 of the Central Excise Rules, 2002. The Tribunal, after considering the submissions and evidence, finds merit in the appellant's argument. It notes that the penalty was imposed based on abetting forgery, falling under Rule 26(2) of the Central Excise Rules, 2002. However, since the period in question predates the insertion of this provision, and there is no evidence of ICICI Bank's direct involvement in the forgery, the penalty imposed on the Bank is set aside, and the appeal is allowed.
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