Penalty reduced in appeal due to facilitation of fraudulent cenvat credit. Upheld under Rule 26.

The Tribunal partially allowed the appeal, modifying the penalty amount to Rs. 1 Lac from the initial Rs. 2 Lacs, based on the established facilitation of fraudulent cenvat credit passing by the appellant. The penalty imposition under Rule 26 of the Central Excise Rules, 2002 was upheld, considering the appellant's issuance of invoices without goods supply that facilitated fraudulent cenvat credit of Rs. 3,93,715.

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Issues: Penalty imposition under Rule 26 of Central Excise Rules, 2002 for fraudulent passing of cenvat credit.

Analysis:
1. The appellant contested the penalty imposition, arguing that apart from an error in mentioning the wrong vehicle number, no other offense was committed. The main appellant's case had been resolved under the Sabka Vishwas Scheme. The Adjudicating Authority acknowledged the mistake in the vehicle number but found no other wrongdoing by the appellant.

2. The Revenue contended that the appellant facilitated fraudulent cenvat credit passing by issuing invoices without supplying goods. They cited statements from Shree Balaji Castings representatives admitting to receiving invoices but not goods, indicating the appellant's involvement in the fraudulent activity.

3. The Adjudicating Authority examined statements from various individuals, including Shree Balaji Castings' representatives and Impex World's personnel. It was revealed that Shree Balaji Castings availed cenvat credit without physically receiving goods, leading to the diversion of goods in the local market. Impex World issued incorrect invoices, enabling Shree Balaji Castings to fraudulently claim cenvat credit.

4. The Tribunal analyzed the confessional statements of witnesses, confirming that the appellant's issuance of invoices without goods supply facilitated fraudulent cenvat credit of Rs. 3,93,715. While upholding the penalty imposition under Rule 26, the Tribunal deemed the original penalty of Rs. 2 Lacs excessive and reduced it to Rs. 1 Lac, considering the amount of cenvat credit involved.

5. Ultimately, the Tribunal partially allowed the appeal, modifying the penalty amount to Rs. 1 Lac from the initial Rs. 2 Lacs, based on the established facilitation of fraudulent cenvat credit passing by the appellant.

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