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of <h1>Penalties upheld for facilitating fraudulent cenvat credit scheme</h1> <h3>Vinod Bhadra, Nissan Copper Ltd, Sanjay Mardia. Bablubhai Abdulbhai Khan, Satish B Agarwal and Rampratap M Sharma Versus C.C.E. -Ahmedabad-I</h3> Vinod Bhadra, Nissan Copper Ltd, Sanjay Mardia. Bablubhai Abdulbhai Khan, Satish B Agarwal and Rampratap M Sharma Versus C.C.E. -Ahmedabad-I - TMI Issues:Penalties imposed under Rule 26 of Central Excise Act, 2002 on various appellants for abatement in the offence of fraudulent availment of cenvat credit by M/s Shree Ram Tubes Pvt Ltd.Analysis:1. Appellant: Shri Bablubhai Abdulbhai Khan - Issue: Appellant's involvement in facilitating clandestine clearance of goods. - Analysis: Appellant facilitated M/s Shree Ram Tubes to evade duty, penalty imposed under Rule 26. Argument made regarding the appellant not being the proprietor at the relevant time was dismissed as he was actively involved in facilitating the wrong availment of credit, justifying the penalty.2. Appellant: Nissan Copper Ltd, Shri Sanjay S Maradia, Shri Vinod Bhadra - Issue: Allegations of issuing job work challan and cenvatable invoice for fraudulent cenvat credit. - Analysis: Appellants involved in not physically transporting goods but passing documents only, creating fake firms for transportation. Penalties rightly imposed under Rule 26 due to their direct role in facilitating fraudulent cenvat credit to M/s Shree Ram Tubes Pvt Ltd.3. Appellant: Shri Rampratap Mahadevprasad Sharma - Issue: Involvement in issuing fake LR for transportation of goods. - Analysis: Appellant admitted to issuing fake LR without actual transportation of goods, aiding in fraudulent availment of cenvat credit. Penalty upheld under Rule 26 for active participation in the fraudulent scheme.4. Appellant: Shri Satish B Agarwal - Issue: Involvement in arranging issuance of fake LRs. - Analysis: Appellant arranged for issuance of fake LRs without actual transportation, aiding M/s Shree Ram Tubes in fraudulent cenvat credit. Penalty justified under Rule 26 for direct involvement in the scheme.5. Quantum of Penalty - Issue: Justification of penalty amount imposed. - Analysis: Penalty amount considered reasonable in relation to the duty involved, no scope for reduction. Tribunal cited a similar case where penalty under Rule 26 was upheld, emphasizing the correctness of the penalties imposed.6. Overall Decision - Issue: Upholding or setting aside penalties imposed on appellants. - Analysis: All appellants found to have direct and active roles in the fraudulent scheme of cenvat credit availment by M/s Shree Ram Tubes. Penalties upheld as correct due to their involvement, especially when M/s Shree Ram Tubes admitted liability. Appeals dismissed, penalties upheld.
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