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2022 (6) TMI 611 - AT - Central ExciseLevy of penalty u/r 26 of CER, 2002 - allegation of facilitating Bluplast Industries Ltd. for taking fraudulent Cenvat Credit on the invoices issued by M/s Shah Foils Ltd. without supply of the goods - Rule 4(5) (a) of CCR - HELD THAT - The charge was made of abatement in passing on fraudulent Cenvat Credit to M/s Bluplast Industries Ltd. on the invoices issued by M/s Shah Foils Ltd. without supply of the goods. It is found that on the same investigation and on the same facts a show cause notice was also issued to M/s Shah Foils Ltd. making the same allegation in the case of SHAH FOILS LIMITED, SHRI KARTIK R SHAH, SHRI RAMESH M SHAH VERSUS C.C.E. S.T. -SURAT-I, II, RAJKOT, AHMEDABAD-III 2019 (1) TMI 1162 - CESTAT AHMEDABAD that the M/s Shah Foils Ltd. passed on the fraudulent credit by issuing invoices without supply of the goods. The said charge was set aside by this tribunal and the same was upheld upto the Hon ble Supreme Court. Thus this tribunal in the case of M/s. Shah Foils Ltd. has held that the contention of the revenue is not sustainable regarding charge of issuance of invoices without actual clearance of goods. On this basis only present appellant were imposed penalty under Rule 26. Since, the tribunal in the above decision clearly held that the goods have been supplied along with invoices. The charges against the present appellants are not sustainable. The appellants are not liable for penalty under Rule 26 - Appeal allowed - decided in favor of appellant.
Issues:
- Appeal against penalty imposed under Rule 26 of Central Excise Rules, 2002 for abetment in passing fraudulent Cenvat Credit without goods supply. - Connection of cases to main investigation against M/s Shah Foils Ltd. - Allegation of fraudulent Cenvat Credit by M/s Bluplast Industries Ltd. - Role of M/s Shri Ram Steels and Shri Atul Madhavji Parekh in the transactions. - Previous tribunal and court decisions related to M/s Shah Foils Ltd. Analysis: 1. Penalty Imposed under Rule 26: - The appeals challenged the penalty upheld by the Learned Commissioner (Appeals) for abetment in passing fraudulent Cenvat Credit without goods supply. The tribunal reviewed the charges against the appellants, emphasizing the connection to the investigation against M/s Shah Foils Ltd. 2. Connection to Main Investigation: - The cases of the appellants were linked to a common investigation involving M/s Shah Foils Ltd. The charges revolved around facilitating fraudulent Cenvat Credit for M/s Bluplast Industries Ltd. without actual goods supply. 3. Allegation of Fraudulent Cenvat Credit: - The allegations against the appellants involved facilitating M/s Bluplast Industries Ltd. in wrongfully availing Cenvat Credit based on invoices issued by M/s Shah Foils Ltd. without actual goods supply. 4. Role of M/s Shri Ram Steels and Shri Atul Madhavji Parekh: - M/s Shri Ram Steels was involved in job work on goods supplied by M/s Shah Foils Ltd. for M/s Bluplast Industries Ltd. The tribunal considered the procedural compliance under Rule 4(5)(a) and challans in the transactions. - Shri Atul Madhavji Parekh acted as a broker for the supply of goods between M/s Shah Foils Ltd. and M/s Bluplast Industries Ltd., emphasizing a direct connection to the main case involving M/s Shah Foils Ltd. 5. Previous Tribunal and Court Decisions: - The tribunal referenced a previous decision related to M/s Shah Foils Ltd., where it was observed that the revenue's contention regarding issuance of invoices without actual goods clearance was not sustainable. This decision formed the basis for setting aside the penalties imposed on the present appellants. 6. Final Decision: - After considering the facts and observations, the tribunal concluded that the appellants were not liable for penalties under Rule 26. Consequently, the penalties were set aside, and the appeals were allowed. This detailed analysis of the judgment highlights the key issues, arguments presented by both sides, relevant legal principles, and the ultimate decision rendered by the tribunal.
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