2022 (12) TMI 768 - AT - Central Excise

Levy of penalty under Rule 26(2)(i) of CER, 2002 - allegation is that these appellants have facilitated the fraudulent availment of Cenvat Credit to M./s Archon - HELD THAT - It is clear that as regard Balaji Logistics they have issued blank LRs, which were used for issuing cenvatable invoices without supply of the goods. In respect of similarly placed appellant SAMIR TRANSPORT COMPANY AND SB ROADLINES VERSUS C.C.E. S.T. -AHMEDABAD-III 2022 (12) TMI 126 - CESTAT AHMEDABAD , this Tribunal has upheld the penalty vide order No. A/11313-11314/2022 dated 31.10.2011, therefore, in this case also applying the same ratio penalty is sustainable and appeals are liable to be dismissed. Therefore, in the present case also the appellant was rightly imposed the penalty under Rule, 26(2)(i). As regard Topline Switchgear P Ltd and Riddhi Steel Tube Ltd., as per the facts discussed by the Adjudicating Authority, it was found that only invoices were issued and no goods were supplied. Therefore, it is establish that all the three appellants have helped M./s Archon for availing the fraudulent Cenvat credit. Accordingly, there are no infirmity in the impugned order imposing penalty under Rule, 26(2)(i) of Central Excise Rules, 2002. Penalties upheld - appeal dismissed.

Summary

Issues:
Imposition of penalty under Rule 26(2)(i) of Central Excise Rules, 2002 for facilitating fraudulent availment of Cenvat Credit to M./s Archon.

Analysis:
The appeals were filed against the order imposing penalties under Rule 26(2)(i) of Central Excise Rules, 2002, alleging that the appellants facilitated the fraudulent availment of Cenvat Credit by M./s Archon. Despite multiple listing dates with no appearance from the appellant, the appeals were taken up for disposal. The Assistant Commissioner representing the revenue reiterated the findings of the impugned order and cited a previous tribunal decision upholding penalties against similarly placed appellants. The Member (Judicial) carefully considered the submissions and records, noting that penalties were imposed on all appellants for facilitating fraudulent passing of credit to M./s Archon. The Adjudicating Authority's findings for each appellant were reviewed:

- Balalji Logistic: Penalty imposed for providing blank LR facilitating M./s Archon to avail Cenvat credit on the strength of fraudulent invoices from M/s Accord.
- Topline Switchgear P Ltd: Invoices issued without dispatch documents, confirmed by statements admitting paper transactions to wrongly facilitate Cenvat Credit for M./s Archon.
- Ridhhi Steel: Invoices showed clearance of goods to M./s Archon without actual supply, with discrepancies in transport documents and missing test reports, indicating fraudulent Cenvat credit availing.

The Member (Judicial) found no infirmity in the impugned order, upholding penalties under Rule 26(2)(i) for all appellants based on their facilitation of fraudulent Cenvat credit availment by M./s Archon. Consequently, the penalties were upheld, and the appeals were dismissed. The judgment was pronounced in open court on 01.12.2022.