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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 ..... other two applicants M/s. K G Ispat Pvt. Ltd. and M/s. Jain Ispat under Rule 26 of Central Excise Rules, 2002. 2. Nobody appeared for M/s. Allianz Steel Ltd. and Shri Vikram Agnihotri. We find that the matter has been coming up on record repeatedly, when it was being adjourned in the interest of justice. As the appellants are again unrepresented today, inspite of notice of hearing having been sent to them well in advance, we dismiss their stay petition for non-prosecution and direct both the applicants to deposit the entire dues within a period of 10 weeks from today and report compliance on 5.12.13. "As regards the other two applicants, we find that they are registered dealers and were supplying the raw materials i.e. waste and scrap to M/s. Allianz Steel Ltd. under the cover of invoice. The investigations conducted by the Revenue reveal that such waste and scrap cleared by the appellant was not being received by M/s. Allianz Steel Ltd., who were availing Cenvat credit on the basis of said invoices issued by the dealers. Further evidence also indicated towards clandestine manufacture and removal of the final product of M/s. Allianz Steel . 3. Learned advocate appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( and the present Rule 26) would not apply. Accordingly at this stage, we are of view that appellant has a good prima facie case on the basis of above decision, we grant waiver of condition of pre-deposit of Rs. 10 lakhs imposed upon said two applicants. 5. All four stays are disposed of in the above manner. (Dictated and pronounced in the open court) ( Archana Wadhwa) Member(Judicial) ( Manmohan Singh ) Member(Technical) Date of Decision 12/02/2015 Per. Rakesh Kumar :- M/s Allianz Steel Ltd., having their factory at 50-B, Industrial Area, 15-B, Industrial Area No.1, A.B. Road, Dewas (M.P.) are manufacturer of Mild Steel Ingots chargeable to Central Excise Duty under heading 7206.90 of the Central Excise Tariff for which the main raw materials are Iron and Steel Scrap, Sponge Iron, Ferro Silicon etc. Beside this, they have also shown the use of MS Ingots (HC) an input of manufacture MS Ingots. Shri Vikram Agnihotri is the Managing Director of M/s Allianz Steel Ltd. The period of dispute in these appeals is from 05/6/06 to 24/9/08. During this period, M/s Allianz Steel Ltd. were availing Cenvat credit of the Central Excise duty paid on inputs and capital goods as per the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e companies or firms constituted under the law and also the 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) wherein the same view has been taken. She also observed that the appeal filed by the Revenue against the Tribunal judgment s in the case Woodmen Industries vs. CCE, Patna (supra) has been dismissed by the Apex court vide judgment reported in 2004 (170) E.L.T. A307. 3. However, Member (Technical) in a separate order dated 24/9/13 recorded by him expressed the view that penalty has been rightly imposed under Rule 26 on M/s Jain Ispat and M/s K.G. Ispat Ltd. for issue of bogus invoices and that in view of this so far as the appeals filed by them are concerned, there is no case for waiver from the requirement of pre-deposit. Member (Technical) accordingly ordered pre-deposit of Rs. 5,00,000/- each from M/s K.G. Ispat Ltd. and M/s Jain Ispat compliance with the provisions of Section 35F. 4. In view of the diference of opinion between Member (Judicial) and Member (Technical), the following point of difference was referred to the undersigned for decision :- "Whether in view of fact of inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the vehicle numbers in a number of invoices issued by M/s Jain Ispat and M/s K.G. Ispat Ltd. were found to be of non-transport vehicles in which the goods mentioned in the invoices could not have been transported and that in the cases where the vehicle numbers were of the transport vehicles, the vehicle owners have denied to have transported the goods and in this regard she pointed out to Commissioner s finding in the impugned order-in-original. She pleaded that sub-Rule (2) of Rule 26 inserted by Notification No. 8/07-CE (NT) dated 01/3/07 specifically provided for imposition of penalty on any person who issues an excise duty invoice without delivery of the goods specified therein or abets issue of such invoices and, therefore, in respect of the cases where such bogus invoices have been issued during period w.e.f. 01/3/07 penalty was specifically attracted on the dealer issuing bogus invoices under Rule 26 (2). With regard to such a bogus invoices issued during period prior to 01/3/07 she cited the judgment of Hon ble Punjab & Haryana High Court in the case of Vee Kay Enterprises vs. CCE reported in 2011 (266) E.L.T. 436 (P&H). She also cited the judgment of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Tubes of India Ltd. vs. CCE, Indore (supra) and also in the case of Woodmen Industries vs. CCE, Patna (supra), the appeal against which has been dismissed by the Apex Court, has held that penalty under Rule 26 can be imposed only on the natural person and not on companies or firms. However, Member (Technical) in this regard has relied upon the judgment of Ahmedabad Bench of the Tribunal in the cases of CCE, Ahmedabad vs. Navneet Agarwal (supra). 10. During the period prior to 01/3/07 Rule 26 provided that: "any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe or liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or Rs. 2,000/-, whichever is greater" W.e.f. 01/3/07 Rule 26 of Central Excise Rules, 2002 was amended and the main Rule 26 as mentioned above become sub-Rule (1) and a sub-Rule (2) was added which provided that any person who issues any excise invoice without delivery of goods specified, therein or abets mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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). 11. In view of the overall facts and circumstances of the case and the legal position on the issue of imposition of penalty under Rule 26 on juristic person, I am of the view that 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. Member (Technical) has ordered pre-deposit of Rs. 5,00,000/- (Rupees Five Lakhs) each from M/s K.G. Ispat Ltd. and M/s Jain Ispat and in my view, the same is reasonable. I do not agree with the view of Member (Judicial) that M/s K.G. Ispat Ltd. and M/s Jain Ispat have strong prima facie case in their favour and the requirement of pre-deposit should be waived. 12. I, therefore, agree with the decision of Member (Technical). The point of difference referred, stands answered, as above. (Pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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