2013 (12) TMI 447 - AT - Central Excise

Tribunal Waives Penalty for CENVAT Credit Abetment

TRARVINDER SINGH DHODY Versus COMMISSIONER OF CENTRAL EXCISE, VAPI

TRARVINDER SINGH DHODY Versus COMMISSIONER OF CENTRAL EXCISE, VAPI - 2013 (294) E.L.T. 598 (Tri. - Ahmd.) Issues: Waiver of pre-deposit of penalty under Rule 26 of Central Excise Rules, 2002 for abetment of availment of CENVAT Credit without receiving inputs.Analysis:1. The appellant, a Proprietor, sought waiver of pre-deposit of penalty imposed under Rule 26 of Central Excise Rules, 2002, for allegedly abetting in the availment of CENVAT Credit without receiving the inputs.2. The Tribunal examined the case where M/s. Dhody Goods Carrier availed credit based on Bills of Entry for goods purchased on high sea sale basis. The Revenue contended that the inputs never reached the factory premises, leading to ineligible credit. The appellant was accused of abetting in preparing such Bills of Entry and availing CENVAT credit without actual receipt of inputs.3. The Tribunal held that the appellant could not be charged under Rule 26 since the main assessee only received the documents for credit availment, not the inputs themselves. Consequently, Rule 26(1) and Rule 26(2) were deemed inapplicable as the appellant did not issue any document for credit availing.4. Considering the above, the Tribunal found that the appellant established a prima facie case for waiving the pre-deposit of the penalty amount. Thus, the application for waiver was granted, and recovery of the penalty stayed pending appeal disposal.5. As the issue fell under the Single Member Bench's jurisdiction, the Registry was instructed to schedule the matter for resolution before the Single Member Bench accordingly.