Manufacturer with ARAI registration aided duty evasion by lending credentials to uncertified firms under Rule 26

CESTAT Ahmedabad dismissed the appeal in a Central Excise duty evasion case involving Chhakkdo Rickshaw manufacturing. The appellant, holding ARAI registration through his firm, facilitated duty evasion by providing his registration to manufacturers lacking proper certification, enabling RTO registration of non-duty paid vehicles. Though not physically involved in transportation or sale, the appellant consciously aided clearance of excisable goods without duty payment by allowing use of his ARAI credentials, constituting violation under Rule 26 of Central Excise Rules, 2002.

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Issues involved: Detection of evasion of Central Excise Duties, imposition of penalty under Rule 26 of the Central Excise Rules, 2002 on the appellant.

Summary:
The judgment pertains to a case where certain manufacturers of "Chhakkdo Rickshaw" were found evading payment of Central Excise Duties. A show cause notice was issued to M/s Shree. Rajshakti Automobiles, Ahmedabad, implicating the present appellant for penalty under Rule 26 of the Central Excise Rules, 2002. The impugned Order-In-Original confirmed Central Excise Duty against M/s Shree. Rajshakti Automobiles and imposed a penalty of Rs. 1,00,000 on the present appellant. The appellant challenged this penalty.

The appellant's representative argued that the main noticee had settled the dispute under SVLDRS Scheme and that Rule 26 was wrongly invoked for imposing the penalty. It was contended that the appellant's role was limited to providing his ARAI-Pune registration for vehicle registration purposes and not in any activities warranting penalty under Rule 26. The appellant cited relevant case laws in support of their argument.

After hearing both sides, it was found that the appellant had facilitated the registration of "Chhakkdo Rickshaw" by providing his ARAI registration, enabling the clearance of non-duty paid vehicles. The appellant's actions were deemed to have contributed to the evasion of Central Excise Duty. The adjudicating authority's findings on the appellant's involvement were upheld, considering the provisions of Rule 26 of the Central Excise Rules, 2002.

The judgment highlighted the specific provisions of Rule 26 and concluded that the appellant's actions fell within the purview of dealing with non-duty offending goods in a manner that facilitated duty evasion. The reliance on case laws by the appellant's advocate was deemed irrelevant to the present matter. Consequently, the appeal was dismissed, upholding the penalty imposed on the appellant.

The judgment was pronounced in open court on 27.10.2023.

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