2019 (5) TMI 1011 - AT - Central Excise

Imposition of penalty u/r 26 of the Central Excise Rules - - HELD THAT - An identical issue was the subject matter of the Tribunal decision in the case of Atlas Pharamchem Indus Pvt Ltd. vs Commissioner of C Ex Ahmedabad-I 2018 (2) TMI 547 - CESTAT AHMEDABAD . The Tribunal observed that in the absence of any doubt of duty paid character of the goods and actual supply of the goods by the third stage dealer by mis-representing as second stage dealer would invite penalty in terms of the Rule 27 of the Central Excise Rules which provides minimum penalty of 5, 000/-. The order of the Original Authority which imposed penalty of 5, 000/- on each of the appellant is restored - appeal disposed off.

Summary

Issues:
Penalty imposed under Rule 26 of the Central Excise Rules.

Analysis:
The judgment concerns two appeals challenging penalties of ?5 Lakhs and ?25,000 imposed on the appellant under Rule 26 of the Central Excise Rules. The investigations revealed that M/s Amtek Auto Ltd., a registered dealer, sourced goods from a second stage dealer and supplied them to manufacturers along with forwarding of Cenvat Credit. The Revenue alleged that the appellant, acting as a third stage dealer, improperly provided the credit, leading to penalty proceedings. Manufacturers who had availed the credit based on the appellant's invoices reversed the Cenvat Credit upon notification. The Original Authority initially imposed a penalty of ?5,000 each, which was later increased by the Commissioner (Appeals). The Tribunal referred to a previous decision involving a similar issue and concluded that misrepresentation by the third stage dealer as a second stage dealer, without doubt on the duty paid status of goods and actual supply, warranted a minimum penalty of ?5,000 under Rule 27 of the Central Excise Rules. Consequently, the impugned order was set aside, and the Original Authority's penalty of ?5,000 on each appellant was reinstated, disposing of the appeal accordingly.