2018 (7) TMI 150 - AT - Central Excise

Tribunal affirms Commissioner decision, dismissing revenue appeal & cross-objection. Rule 26 penalty set aside.

The Tribunal upheld the Commissioner (Appeals) decision, dismissing the revenue's appeal and disposing of the cross-objection. The order was pronounced in ... Penalty u/r 26 of CER - abetting the receipt of excisable goods against invalid documents and passing on irregular cenvat credit to their customers - Held that:- It is not in dispute that the goods covered by the invoices were received at Dankuni depot. Only some of the goods that were addressed to Taratala depot were received at Dankuni depot due to the transition of depot operation of the assessee - As per Rule 11(2) of the said Rules, It is clear that the invoice should bear the name of the consignee, which in the instant case has been recorded correctly and the same has not been disputed by the department. Penalty under Rule 26(2) of the Rules is imposable on a person if he (i) issues any invoice without delivery of goods, (ii) issues any document or abets in making such document on the basis of which the recipient of the document avails any ineligible benefit - In the instant case, the assessee had not issued invoices without delivery of goods or that such invoices had enabled their customers to avail any inadmissible credit of duty. Therefore, Rules 11(2) and 26(2) of the Rules are not applicable to the instant case. Appeal dismissed - decided against Revenue. Issues:- Imposition of penalty under Rule 26 for abetting receipt of excisable goods against invalid documents and passing on irregular cenvat credit.- Appeal against the Commissioner (Appeals) order setting aside the adjudication order.- Applicability of Rule 11(2) and Rule 26(2) of the Central Excise Rules, 2002.Analysis:1. The respondent, engaged in manufacturing excisable goods, faced a penalty under Rule 26 for receiving goods against invalid documents and passing on irregular cenvat credit. The Commissioner (Appeals) set aside the penalty, leading to the appeal before the Tribunal by the revenue, with the respondent filing a cross-objection.2. The revenue argued that goods were consigned to one depot but received at another, violating statutory provisions. They sought the reversal of the Commissioner (Appeals) order.3. The respondent's counsel presented case laws and statutory provisions, explaining that due to a depot shift, invoices reflected the old address. They demonstrated through ERP system details and logistic records that no violation occurred. They argued against the penalty under Rule 26(2) and cited legal precedents to support their case.4. The Tribunal, after hearing both sides, examined the records and found that goods addressed to one depot were received at another due to operational changes. The invoice correctly identified the consignee, meeting Rule 11(2) requirements.5. Rule 26(2) allows penalties for issuing invoices without goods delivery or enabling ineligible benefits. However, as the respondent did not issue such invoices or enable inadmissible credits, Rules 11(2) and 26(2) were deemed inapplicable.6. Consequently, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the revenue's appeal and disposing of the cross-objection. The order was pronounced in the open court, concluding the legal proceedings.