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TMI Blog2017 (2) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... oved in contravention of any provisions of rule or notification issued under these rules, penalty can be imposed. If any goods are clandestinely removed without issue of invoice and handled by a registered dealer then obviously the registered dealer cannot take credit and cannot pass on credit as there is no excise invoice - Rule 25 identifies purchaser or manufacturer or registered person of a warehouse or an importer or a registered dealer as a person liable to penalty because of the fact that they are registered with the Revenue and are reasonably conversant with law. It is not necessary that they could do actually official deal with such goods in their capacity as manufacturer or purchaser or registered dealer etc. Thus, penalty can be imposed on all such persons irrespective of the fact that they have dealt with these goods on record or off record - M/s Pharmaica and M/s Vipul Drugs are held liable to penalty u/r 173Q(1) of CER, 1944 and Rule 25 of CER, 2002 being a registered dealer - the penalty in case of Vipul Durgs is reduced from ₹ 8 lakhs to ₹ 4 lakhs and in case of M/s Pharmaica, the same is reduced from ₹ 2 lakhs to ₹ 1 lakh. Appeal disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for recovery of their dues as M/s Sarvodaya Laboratory was unable to pay the same. He argued that they were receiving the proper excise invoice, delivery challan and LR along with the commercial invoice in their favour from M/s Sarvodaya Laboratory. 2.2 Shri C.S. Biradar, learned Advocate appeared for M/s Money Pharma. Learned Counsel argued that they were only a consignment agent and were distributing the goods in the State of Kerala on behalf of M/s Sarvodaya Laboratory. They were not aware of the illegal activity of M/s Sarvodaya Laboratory. He argued that the Order-in-Original imposed penalty on tem under Rule 173Q of Central Excise Rules, 1944 and Rule 25 of the Central Excise Rules, 2002 by observing that they wee concerned in transporting, keeping and selling or purchasing or in any other manner dealing with the excisable goods. These offences can only result in invocation of Rule 26 and not of Rule 25. He argued that they are not registered dealer and, therefore, no penalty under Rule 25 can be imposed on them. 2.3 Ms. Nehal Parekh, learned Advocate appeared for M/s Vipul Drugs and Shri Vipul N Mehta, Director of M/s Vipul Durgs and submitted a written submissions. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer, following the principles of natural justice. It applies only to purchaser or manufacturer or registered person of warehouse or an importer. In the instant case, M/s Money Pharma is not a registered dealer. M/s Pharmaica and M/s Vipul Drugs are registered dealer. Rule 25 is very clear that penalty on a person, who is not under the category specified in the said Rule cannot be imposed. Since M/s Money Pharma does not fall in any category specified under Rule 25, no penalty under Rule 25 can be imposed on M/s Money Pharma. M/s Vipul Drugs is a registered dealer and have claimed that they have not availed credit of these goods as registered dealer. A perusal of the reply dated 22.3.2006 of M/s Vipul Drugs to Commissioner of Central Excise shows that they had entered into an arrangement with M/s Sarvodaya Laboratory for recovery of outstanding amount. The arrangements made are as under: - We have started business with M/s Sarvodaya Laboratory in the year 1998 for supply of raw materials. During the period of two years, substantial amount was outstanding from M/s Sarvodaya Laboratory against the raw materials supplied by us. Therefore, Director of MIs Sarvo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious hospitals. 4.1 M/s Vipul Drugs has also stated in their appeal memorandum that they did not insist on receipt of excise invoice as they could not have taken credit of the same. In the above stated facts, the knowledge of under-valuation by the appellant is clearly established. M/s Pharmaica has argued that they were receiving the excise invoices and they could not be held liable if such invoices were fake. M/s Vipul Drugs has, however, stated that they were not receiving any invoice. 4.2 The second issue which arises whether penalty can be imposed on M/s Vipul Drugs and Pharmaica when they are registered dealer though they have not availed credit of these goods or transferred the credit on these goods. Clause (a) to Rule 25 reads as follows: - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notification issued under these rules. It says that if any excisable goods are removed in contravention of any provisions of rule or notification issued under these rules, penalty can be imposed. If any goods are clandestinely removed without issue of invoice and handled by a registered dealer then obviously the registered de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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