Retrospective penalty provisions cannot apply to earlier invoice-without-supply allegations; Revenue appeal rejected.

Penalty for issuing invoices without delivery of goods for the 1990-91 period was found unsustainable because the later-amended Rule 26 of the Central Excise Rules, 2002, covering such conduct, was inserted only by Notification No. 8/2007-C.E. (N.T.) and could not govern an earlier period. The alleged contravention had been proceeded against under Rule 209A of the Central Excise Rules, 1944, but the Tribunal held that the subsequent provision had no retrospective application. It also noted that an identical issue for another period had already been decided in the respondents' favour, so the Revenue's appeal was rejected.

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Issues: Whether penalty could be sustained for issuance of invoices without delivery of goods for the period 1990-91 when the later-amended penalty provision under Rule 26 of the Central Excise Rules, 2002 was inserted only by Notification No. 8/2007-C.E. (N.T.).

Analysis: The penalty had been imposed under Rule 209A of the erstwhile Central Excise Rules, 1944 on the allegation that invoices were issued without delivery of goods. The later provision in Rule 26 of the Central Excise Rules, 2002, which specifically covered issuance of invoices without supply of goods and related abetment, came into force only with the insertion made by Notification No. 8/2007-C.E. (N.T.). Since the dispute related to the period 1990-91, the subsequent provision could not govern the case. The Tribunal also noted that an identical issue for a different period had already been decided in the respondents' favour.

Conclusion: The penalty was not sustainable and the Revenue's appeal was rejected.

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