2009 (7) TMI 1014 - AT - Central Excise

Summary

Issues:
1. Penalty imposition under Section 11AC
2. Personal penalties on partners, executives, and authorized signatories
3. Wrongful availment of Cenvat credit without receiving inputs

Penalty imposition under Section 11AC:
The Appellate Tribunal CESTAT AHMEDABAD addressed the issue of penalty imposition under Section 11AC in the case filed by the Revenue against the order of the Commissioner (Appeals). The Commissioner had set aside the remaining penalty as the appellants had paid duty, interest, and 25% of the penalty within thirty days. The Revenue cited the Supreme Court's judgment in Union of India v. Dharmendra Textile Processors, but the Tribunal noted that the Commissioner had invoked the first proviso to Section 11AC, which states that if 25% of the penalty is paid within thirty days, the balance penalty is not to be upheld. The Tribunal found no fault in the Commissioner's decision regarding the main unit, M/s. Raj Industries.

Personal penalties on partners, executives, and authorized signatories:
The Appellate Authority also considered the imposition of penalties on the partner, executive, and authorized signatory of the firm. It was noted that Rule 13 of Cenvat Credit Rules does not provide for personal penalties, as established in the case of Scor Tour Impex. Additionally, the allegations against M/s. Raj Industries involved wrongful availment of Cenvat credit without actually receiving the inputs. Referring to the Tribunal's decision in the case of Steel Tubes, it was held that penalties cannot be imposed without dealing with the goods. Therefore, the Appellate Tribunal found no grounds to interfere with the Commissioner (Appeals)'s order regarding personal penalties, and the appeals filed by the Revenue were rejected.

This judgment highlights the Tribunal's detailed analysis of penalty imposition under Section 11AC and the limitations on imposing personal penalties on partners, executives, and authorized signatories. The decision emphasizes the importance of actual dealing with goods in penalty imposition cases related to wrongful availment of Cenvat credit without receiving inputs.