2004 (12) TMI 267 - AT - Central Excise

Summary

Issues: Imposition of penalties on the appellant under Rule 173Q1(bbb) of the Central Excise Rules for not bringing steel consignments to registered premises.

Analysis:
The appeals before the Appellate Tribunal CESTAT, New Delhi were directed against the penalties imposed on the appellant dealer for not bringing steel consignments to its registered premises, as required under Rule 173Q1(bbb) of the Central Excise Rules. The appellant, a registered dealer in iron and steel, supplied materials to manufacturers who were entitled to credit for duty paid on the purchased iron and steel. The penalties were imposed on the grounds that the appellant did not bring the steel consignments to its premises but disposed of them from the premises of cutters. The appellant contended that there was no justification for the imposition of penalties, emphasizing that Rule 173Q1(bbb) pertained to the "wilful entry of wrong or incorrect particulars of invoice with intent to facilitate the buyer to avail credit of duty." The appellant argued that practical difficulties prevented them from bringing the consignments to their premises, and the Commissioner acknowledged that the credits taken by the purchasers were correct. The appellant cited a previous Tribunal decision in support of their contention that no penalty was warranted in their case.

Upon hearing both sides and examining the records, the Tribunal found merit in the appellant's argument. It was established that there were no wilful or incorrect entries in the invoices issued by the appellant to enable purchasers to take credit. The Commissioner's acceptance that the credits were rightfully taken indicated that there was no intent on the appellant's part to facilitate the buyers in availing undue credit. The Tribunal concluded that the penalties imposed were unjustified, as there was no evidence of wilful misconduct by the appellant. Consequently, the penalties imposed under the impugned orders were set aside, and the appeals were allowed, with any consequential relief granted to the appellant. The judgment highlighted the importance of adherence to legal provisions and the necessity of establishing intent in cases involving penalties under excise rules.