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TMI Blog2015 (6) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... -Rule (2) of Rule 26 can be imposed on a juristic person also i.e. on a company or a firm. Moreover, if a private limited company or public limited company or a partnership or a proprietorship firm as a registered dealer issues bogus invoices without supply of any material to enable another person avail the Cenvat credit, it would not be correct to say that in such cases the person who had issued the bogus invoices would not be liable for penalty under Rule 26 (2). - this is not the case where the requirement of pre-deposit of penalty for compliance with the provisions of Section 35F should be totally waived - Partial stay granted. - Excise Stay Application Nos. 1682, 1817-1819 of 2012, Excise Appeal Nos. 1328, 1424-1426 of 2012 - Stay Order Nos. SO/51362-51365/2015-EX(DB) - Dated:- 9-4-2015 - Archana Wadhwa , Member (J), Manmohan Singh, Member (T),Rakesh Kumar) Member (Technical) And B.S.V. Murthy Technical Member,J. For the Petitioner : Shri K K Anand , Adv. For the Respondent : Shri M S Negi , DR ORDER Per Archana Wadhwa (for the Bench): All the stay petitions are being disposed of by a common order as they arise out of same impugned order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was held that Rule 26 is applicable only on persons and not on the firms constituted under the law. The said decision of the Tribunal stand upheld by the Hon ble Supreme Court when the appeal filed by the Revenue was rejected as reported in 2004 (170) ELT A 307. He also draws our attention to Tribunals decision in the case of Aditya Steel Industries [1996 (84) ELT 229 (Tri) laying down to the same effect. As regards the Jain Ispat, he submits that they have raised all the invoices and have actually sent the goods in which case no penalty can be imposed upon them. Thus, if the Revenue s allegation are accepted, at this stage he submits that inasmuch as according to the Revenue, they have not sent the goods to the manufacturer and has only raised the invoices, no penalty would still be imposable upon them as held by the Larger Bench of the Tribunal in the case of Steel Tubes of India Ltd. vs. CCE, Indore [2007 (217) ELT 506 (Tri-LB). 4. After hearing the learned DR, we find that the Tribunal decision in the case of Woodmen Industries was upheld by the Supreme Court. As such, we are of the view that no penalty could have been prima facie imposed upon K G Ispat Ltd. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s K.G. Ispat Pvt. Ltd. and M/s Jain Ispat, no goods have been received and only the Cenvat credit had been passed on. It is on this basis that the Commissioner by the impugned order dated 23/2/12 while confirming the duty demand and Cenvat credit demand, as mentioned above, against M/s Allianz Steel Ltd., Dewas alongwith interest thereon under Section 11AB and imposition of dutiable penalty of ₹ 1,45,34,221/- on them under Section 11AC, had also imposed penalty of ₹ 10,00,000/-, each on M/s K.G. Ispat Pvt. Ltd. and M/s Jain Ispat under Rule 26 of the Central Excise Rules, 2002. The penalty has been imposed on M/s Jain Ispat and M/s K.G. Ispat for issuing bogus invoices without supply of any material and thereby enabling M/s Allianz Steel Ltd. to avail the Cenvat credit. Against this order of the Commissioner, these appeals have been filed by M/s Jain Ispat, M/s K.G. Ispat Ltd. and M/s Allianz Steel Ltd. alongwith stay applications. 2. Member (Judicial) in the order dictated in the open court on 12/09/13 dismissed the stay application of M/s Allianz Steel Ltd. and its Managing Director Shri Vikram Agnihotri for non-prosecution and directed both of them to deposit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut supply of any material, it is settled law that penalty whether under Rule 26 (1) or under Rule 26 (2) can be imposed only on natural persons and not on any companies or firms who are juristic persons not natural person, that this issue stands decided in the favour of the appellants by Larger Bench judgment of the Tribunal in the case of Steel Tubes of India Ltd. vs. CCE, Indore reported in 2007 (217) E.L.T. 506 (Tri. LB) and also the Tribunal s judgment in the case of Woodmen Industries vs. CCE, Patna (supra), that the appeal filed by the Government against the Tribunal s judgment in the case of Woodmen Industries vs. CCE, Patna (supra) has been dismissed by the Apex court vide judgment reported in 2004 (170) E.L.T. A307, that no reason had been given by Member (Technical) for not following the judgment of the Larger Bench of the Tribunal in the case of Steel Tubes of India Ltd. vs. CCE, Indore (supra) and also the judgment of the Tribunal in the case of Woodmen Industries vs. CCE, Patna (supra), which has been affirmed by the Apex Court, that even otherwise, there is no evidence in support of the Department s allegation that M/s Jain Ispat and M/s K.G. Ispat Ltd. have issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn against M/s Jain Ispat and M/s K.G. Ispat Ltd. He also pleaded that the cross examination of the transporters whose statements had been relied upon had been requested, but was not allowed and, therefore, those statements cannot be used for imposition of penalty on M/s Jain Ispat and M/s K.G. Ispat Ltd. Beside this, he also pleaded that out of total 75 invoices on the basis of which the Cenvat credit, in question, had been taken, verification had been done only in respect of a few invoices. 8. I have considered the submissions from both the sides and perused the records. 9. The penalty on M/s K.G. Ispat Ltd. and M/s Jain Ispat has been imposed under Rule 26 of the Central Excise Rules, 2002 for issuing bogus invoices without supply of any material to M/s Allianz Steel Ltd. The allegation of issue of bogus invoices made against M/s K.G. Ispat Ltd. and M/s Jain Ispat is based on certain evidence which can be gone into in detail only at the stage of final disposal and at this stage it cannot be said that there is no evidence in this regard, as some of the transporters have denied having transported the goods covered under the invoices and in some cases the registration numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies vs. CCE, Patna (supra) has held that the word any person in Rule 26 refers only to a natural person and penalty under this Rule can not be imposed on a company or a firm, I find that the Apex Court in the case of Madhumilan Syntex Ltd. vs. Union of India reported in 2007 (210) E.L.T. 484 (S.C.) in para 23 of the judgment with regard to the question of prosecution of a company under the provisions of the Income Tax Act has held that while it is, no doubt, true that a company is not a natural person but is a legal or juristic person, the Corporate criminal liability is not unknown to law, that law is well settled on the point and that while a juristic person cannot be ordered to suffer imprisonment, other consequences, like payment of fine would ensue. Following the above judgment of the Apex Court, a Coordinate Bench of the Tribunal in the case of Twenty First Century Wire Rods Ltd. vs. CCE Cus, Goa reported in 2010 (250) E.L.T. 94 (Tri. Mumbai) in para 38 of the judgment has held that penalty under Rule 26 can be imposed on natural as well as juristic person. The judgments of the Tribunal in the case of Steel Tubes of India Ltd. vs. CCE, Indore (supra) and in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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