2020 (3) TMI 842 - AT - Central Excise

Imposition of penalty u/r 26 of CER - Allegation of issuance of Cenvatable invoice to various customers without supplying of goods - HELD THAT - Since, undisputedly, all the evidences relied upon in the present case were already considered by this Tribunal in the case of M/S SUN TEXTILE ENGINEERS, M/S SHAH FOILS LTD. VERSUS C.C.E. S.T. - SURAT-I 2019 (12) TMI 846 - CESTAT AHMEDABAD . Therefore, there is no need to again deal with all the common evidences such as pen drives recovered, documents recovered, etc. - In the present case, the only issue is related to imposition of penalty under Rule 26 against the appellant on the ground that they have fraudulently passed on the credit without supplying the goods. The common evidence such as bill conditioning ledger, statements, etc were also considered. As the Tribunal has come to a conclusion that these evidences are not sufficient and accordingly, the charge of Shah Foils Ltd. that they have only issued the bills and not supplied the goods were not accepted by the Tribunal - In the present case, there are various traders in whose name the Cenvatable invoices were issued. In the case which arose out of same evidence, therefore, in the present case also, the penalty imposed on the appellants will not sustain - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellants are liable for penalty under Rule 26 for issuing Cenvatable invoices without supplying goods.

Analysis:
The appellant's counsel argued that the cases were based on a common investigation by DGCEI, similar to previous cases where proceedings were dropped. The Tribunal upheld this in the case of Shah Foils Ltd. vs CCE, which was also affirmed by the High Court. The counsel cited various judgments to support the lack of sufficient evidence against the appellants. On the other hand, the Revenue representative relied on different judgments to support the findings of the impugned order.

The Tribunal found that all evidence in the present case had already been considered in previous cases involving the same parties. The main issue was the imposition of penalty under Rule 26 for allegedly passing on credit without supplying goods. The Tribunal referred to its previous order in the Shah Foils Ltd. case, where it was held that the evidence was insufficient to establish the charge. The Tribunal emphasized the lack of physical evidence showing that the appellants issued invoices without accompanying goods, ultimately setting aside the penalty imposed.

The Tribunal highlighted that the same issue had been extensively examined in previous cases with common evidence, such as bill conditioning ledgers and statements. The Tribunal concluded that the evidence was not sufficient to support the charge against the appellants, similar to the findings in the case involving Sun Textiles Engineering. As in previous cases, where proceedings were dropped due to lack of evidence, the penalty imposed on the appellants was set aside in the present case as well.

In conclusion, the Tribunal ruled in favor of the appellants, setting aside the penalty imposed under Rule 26. The decision was based on the lack of substantial evidence to prove the allegations of issuing invoices without supplying goods, consistent with previous judgments involving the same parties and evidence. The appeals were allowed, and the impugned orders regarding the penalty were overturned.