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TMI Blog2019 (2) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that followed search of the residential premises of an employee of the appellant-firm during which some invoices had been recovered, the officers of Central Excise came to the conclusion that these were fictitious and generated for facilitating the availment of CENVAT credit by the entities therein named without corresponding procurement of goods described therein. The proceedings culminated with imposition of penalty of Rs. 87,08,253/- under rule 26 of Central Excise Rules, 2002. 2. According to Learned Counsel, the entire recovery of duty, and imposition of penalty, was based on erroneous foundation and despite lack of any evidence against the appellant. He contends that of the 703 invoices that were recovered and taken up for invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Vadodara [2010 (250) ELT 375 (Tri.Ahmd.)]. He further contends that adjudicating authority has placed reliance on statement recorded on 31st July 2008, but, with subsequent retraction, the want of any further pursuit of the enquiry by the central excise authorities rendered the implicating of the partner of the firm to be dubious in the light of denial by the individual concerned. According to him, this selective reliance on a retracted statement while discarding the denial of the allegation by the partner is opportunistic. He pointed out that, during the pendency, the original authority was made aware that the person whose statement had been recorded was no more, and that, in the absence of negation of the retraction, reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harge of supply of invoices without supply of goods devolved on appellant which they had failed entirely to do. On the submission that the goods would need to be held liable to confiscation before penalty under rule 26 of Central Excise Rules, 2002 could be imposed, he asserts that the deliberate commission of fraud on the part of the appellant could not absolve him from the consequence of penalty by recourse to technical arguments. According to him, the contention of the appellant that they are not 'a person' on whom penalty could be imposed under rule 26 of Central Excise Rules, 2002 runs counter to the definition of 'person' in section 42 of General Clauses Act, and that section 2(31) of Income Tax Act, 1961 also did not offer such restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. On the contrary, the entire cases been built around the goods not having passed into the possession of the buyers named in the 703 invoices and, therefore, the goods are not offending even if sold to buyers who are not on record. In the absence of any offence in relation to the goods that are alleged to have been not supplied to persons on record, rule 26 cannot be invoked. On this restriction in and non-applicability of, rule 26 of Central Excise Rules, 2002, the impugned order is liable to be set-aside. 8. It is also abundantly clear from the decision of the Tribunal in re Woodmen Industries '9. ....... The said rule permits imposition of penalty on a person and not on the firm as held in the case of Aditya Steel Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X
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