2000 (12) TMI 290 - AT - Central Excise

Summary

Issues:
Penalty imposition under Rule 173Q(1)(bb) and (d) of the Central Excise Rules on the appellant for issuing Modvatable invoices without physically bringing goods into the registered godown and facilitating inadmissible credit of duty paid on goods.

Analysis:
The judgment pertains to penalty imposition on the appellant for violating Rule 173Q(1)(bb) and (d) of the Central Excise Rules. The Commissioner imposed a penalty of Rs. 64 lakhs on the appellant, a registered dealer in various metal products, for issuing Modvatable invoices without physically bringing the goods into their registered godown, thereby facilitating buyers to avail inadmissible credit of duty. Additionally, penalties were imposed on the manager and clerk of related entities under Rule 209A. The appellant challenged the penalties imposed.

The Tribunal analyzed the provisions of Rule 173Q(1)(bb) and (d) to determine the applicability of the penalties. It was observed that the ingredients of Rule 173Q(1)(bb) were not attracted to the appellant as a registered dealer. The Commissioner failed to specify the exact contravention beyond mentioning a violation of Rule 57G. The Tribunal noted that the charge against the appellant aligned more with Rule 173Q(1)(bbb) post-amendment, which covers incorrect particulars in invoices to facilitate buyers in availing impermissible duty credit. However, since this sub-rule was not invoked in the show cause notice or for penalty imposition, it was not considered in the judgment.

Regarding Rule 173Q(1)(d), the Tribunal ruled it was not applicable to the appellant as there was no duty liability on the dealer. The rule pertains to intention to evade duty payment, which did not apply in this case. The Tribunal highlighted that Rule 173Q(1)(d) does not encompass acts of abetment or facilitation, which were central to the case against the appellant.

Ultimately, the Tribunal held that the penalties imposed on the appellant and the other two individuals could not be sustained. The penalties were set aside as the charges were not in alignment with the invoked rules. The judgment favored the appellant, setting aside the penalty and allowing all three appeals against the impugned order.