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of <h1>Appellate authority overturns penalty on manufacturer due to lack of evidence under Central Excise Rules</h1> <h3>Lilasons Steel Tubes Ltd. Versus Commissioner of C. Ex., Faridabad-I</h3> Lilasons Steel Tubes Ltd. Versus Commissioner of C. Ex., Faridabad-I - 2016 (339) E.L.T. 257 (Tri. - Chan.) Issues:Impugned order imposing penalty under Rule 26(2) of the Central Excise Rules, 2002 on the manufacturer of steel products for alleged involvement in fake transactions through issuance of Cenvatable invoices.Analysis:The case involved an appeal against the penalty imposed on the manufacturer under Rule 26(2) of the Central Excise Rules, 2002. The manufacturer, selling goods through a dealer, was alleged to be engaged in fake transactions by issuing Cenvatable invoices. The investigation was conducted at the dealer's end, where statements were recorded implicating the manufacturer indirectly. However, no direct investigation was carried out at the manufacturer's end to verify the allegations. The manufacturer contested the penalty, arguing that no evidence proved they issued invoices without supplying goods. The appellate authority considered the submissions of both parties and noted the lack of direct evidence against the manufacturer. The authority found that without concrete proof from the manufacturer's end, the penalty under Rule 26(2) was not sustainable. Therefore, the impugned order imposing the penalty on the manufacturer was set aside, and the appeal was allowed.
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