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TMI Blog2018 (7) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... is no document corroborating the consignment of Pig Iron having fixed weight of 27.5 M.T./28 M.T. loading in the container of Concord is related to the appellant's consignment. On perusal of the statement of the appellant no. 3 it is apparent on the face of record that the appellant no. 3 was engaged in a trading business on the basis of the documents of Cenvat Invoice to take any ineligible benefits to the manufacturer - penalty upheld - However, the quantum of penalty is excessive which is required to be reduced. The appeals filed by the appellant no. 1 and 2 are allowed - Appeal of appellant no. 3 allowed in part. - Excise Appeal Nos.: E/75517/17, E/75603/17 & E/75629/2017 - FO/75309-75311/2018 - Dated:- 9-3-2018 - SHRI P.K. CHOUDHARY, JUDICIAL MEMBER Sri B.N. Chattopadhyay, Consultant for Mittal Iron Foundry Sri V.K. Agarwal Sri A.K. Bhattachariya, Consultant for Sri S.N. Dey : For Appellant(S) Sri S. Guha, A.C. (A.R.) For The Respondent(S) ORDER PER SHRI P.K. CHOUDHARY:- Briefly stated the facts of the case are that the appellant is engaged in the manufacture of CI Ingot Mould and Un-Machined CI Casting classifiable under Chapter 72 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the consignment of Pig Iron to one agent, Shri Satya Narayan Dey, Proprietor known as Satyababu/Sottobabu or Satya Bengali. It has also recovered information that Shri Satya Narayan Dey purchased the Pig Iron in the name of downstream manufacturer and sold the same to the other parties at Dehi, Tughlaqabad in cash. Shri Dey lifted the materials to the places other than the factory of such downstream manufactures by arranging containers from CONTAINER CORPORATION OF INDIA LIMITED (CONCOR) and sealing the same through his agent, prepare fake invoices and Road Challan for safe transport of the consignment upto CONCOR Terminal by means of heavy vehicle. It was found that Shri Dey maintained an Exercise Book in respect of such transactions and the name of the appellant company was found therein. On that basis DGCEI Officers recorded the statement of the Director of the appellant company. Shri Vijay Kumar Agarwal, Director of the appellant company in its statement dated 12.07.2012 stated that they availed the Cenvat Credit during the period 2007-08 and 2008-09 on Pig Iron, which they procured from M/s. Tata Metalics Limited, M/s Ramswaroop Loha Udyog Limited and others. It is stated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant is made out on the basis of statement of Shri Satya Narayan Dey and his exercise book. 6. The Ld. Counsel for appellant No. 3, Shri Satya Narayan Dey, Stated that the appellant did not issue invoice or any other document on the basis of which appellant No. 1, took in- eligible benefit of availing CENVAT Credit under Cenvat Credit Rules, 2004. It is also submitted that there is no evidence in the Show Cause Notice to even remotely suggest that the appellant had any knowledge about CENVAT Credit taken and / or misuse of the same. It is further submitted that the appellant had no knowledge of the alleged misuse of the CENVAT Credit and he has not handed the goods and therefore, penalty under Rule 26 of Cenvat Credit Rules, 2004 cannot be imposed. 7. It appears from the Show Cause Notice, I that Shri S.N. Dey, the appellant no. 3 in his statement stated that he was conducting the Trading Business in a different manner which included Purchase and Sale of steel products in the name of Sam Sons India. Purchase and Sale of scrap and steel materials in the name of M/s. N.K. Lohan Udyog and in the name of fake unit M/s. Patwari Sons and acting as Commission Agent of several custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant no. 1 and 2. The Hon'ble Calcutta High Court in the case of Commissioner of Customs (Preventive), West Bengal, Kolkata Vs. Ritu Kumar as reported in 2005 (12) LCX 0415 held that goods were purchased by making payment by Account Payee Cheque which was encashed, no evidence to prove such assertion as wrong, the burden was not discharged by the Revenue in the facts and circumstances of the case and such substantial question of law is answered in favour of the party. 9. The Learned Counsel for the appellant no. 1 and 2 referred various Case Laws as under: (i). Rhino Rubbers Pvt. Ltd. Vs. Collector of Central Excise, Bangalore reported in 1996 (85) E.L.T. 260 (Tribunal). (ii). Hindustan Coir Products Ltd. Vs. Collector of Central Excise, Meerut reported in 1996 (85) E.L.T. 263 (Tribunal). (iii). Rutvi Steel Alloys Vs. Commissioner of Central Excise, Rajkot reported in 2009 (243) E.L.T. 154 (Tri.-Ahmd.). (iv). Kumar Trading Company Vs. Commissioner of Trade Tax, Lucknow reported in 2008 (230) E.L.T. 240 (All.) (v). Sulekhram Steels Pvt. Ltd. Vs. Commissioner of Central Excise, Ahmadabad-Il reported in 2011 (273) E.L.T. 140 (Tri.-Ahmd.). 10. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause Notice that the appellant no. 1 would avail Cenvat Credit on the impugned goods. 12. It is submitted that no penalty can be imposed on the appellant no. 3 under Rule 26(2) of the Central Excise Rules, 2002 because the appellant did not issue any invoice or any other documents on the basis of which the appellant no. 1 availed the credit. Rule 26 of Rule 2002 provides penalty for certain offences. In terms of sub Rule (1) of Rules 26 any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, grouping, concealing, selling or purchasing or any other manner deals with any excisable goods which he knows or has reason to belief are liable to confiscation shall be liable to penalty. Clause (ii) of Sub Rule (2) of Rule 26 states that any person, who issues any other documents or abates in making such documents, on the basis of which the user of the said Invoice or documents is likely to take or has taken ineligible benefits under the Act or the Rules shall be liable to penalty. 13. In the present case on perusal of the statement of the appellant no. 3 it is apparent on the face of record that the appellant no. 3 was engaged in a tradi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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