2017 (11) TMI 1458 - AT - Central Excise

Penalties - CENVAT credit - fake documents - Held that - the penalty equal to the credit allegedly wrongly taken has been imposed under three different provisions of law for the same offence - for single offence, multiple penalties need not be imposed. Penalty under Rule 15(1) of the Cenvat Credit Rules and penalty imposed under Rule 25(1)(a) of Central Excise Rules 2002 read with 11AC are set aside. Penalty imposed under Section 15(2) read with 11AC of Central Excise Act 1944 is upheld. Redemption fine - Held that - there is no merit in such imposition of Redemption Fine when no goods were seized and no goods are available for confiscation. Redemption Fine imposed is therefore set aside. Appeal allowed in part.

Summary

Issues involved:
Confirmation of demand, interest, and penalty under various provisions of law, imposition of redemption fine in lieu of confiscation of goods, contesting the penalty equivalent to the demand of duty imposed on the partner of the firm.

Analysis:
The appeal was filed against the confirmation of demand, interest, and penalty equal to the duty evaded under different provisions of law, along with the imposition of a redemption fine in lieu of confiscation of goods. The appellants argued that they had initially taken credit on the basis of invoices without receiving any goods, but later provided evidence to prove that they had indeed received the goods. They reversed the credit, paid interest, and a portion of the penalty promptly. The main contention was against the penalty equivalent to the demand of duty imposed on the partner of the firm, pleading for leniency.

The counsel for the appellants highlighted that penalties under three different provisions of law were imposed for the same offense, which they deemed excessive. They pointed out a similar case involving a different firm where only one penalty provision was upheld, suggesting that multiple penalties for a single offense were not warranted. The Appellate Tribunal observed that the firm had promptly reversed the credit and paid the necessary amounts after the adjudication order. Consequently, penalties under Rule 15(1) of the Cenvat Credit Rules and Rule 25(1)(a) of the Central Excise Rules 2002, along with the redemption fine, were set aside. However, the penalty imposed under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC of the Central Excise Act was upheld as the appropriate penalty for the offense.

Moreover, since no goods were seized or available for confiscation, the imposition of a redemption fine was deemed unjustified and subsequently set aside. The Tribunal also revised the penalty imposed on the partner of the firm, considering it excessive, and reduced it from &8377; 107,190 to &8377; 50,000. The appeal was partly allowed based on the above terms, with the judgment pronounced on 23/10/17.