TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 606
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.... These Viramgam based and users of HR Trimmings scrap being unregistered SSI units, do not avail Cenvat credit and hence do not require the excise duty paid invoices. The said dealers through brokers such as M/s. Diamond Roadways, Mumbai supplied by M/s. JISCO to M/s. NSPL a manufacturer of M.S. Ingots at Musalgaon-Sinnar, District Nashik. The brokers who used to arrange for transport of goods from the factories of M/s. JISCO to Viramgam took the delivery from the factory of M/s. JISCO, but the name of consignee in the corresponding invoice was given as M/s. NSPL, so that the M/s. NSPL could avail Cenvat credit on the strength of the invoices. However, instead of delivery to M/s. NSPL, the consignee appearing in the invoices, were diverted to Viramgam, where the same were delivered to the small scale units engaged in the manufacture of downstream products such as nails, pins, barbed wire etc. M/s.NSPL in turn availed Cenvat Credit of the duty paid as appearing in the said in voices without having physically received the goods mentioned therein. The adjudicating authority confirmed the demand of inadmissible credit availed and utilized by M/s. NSPL and imposed penalty of Rs. 2,04,52....
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.... way concerned with any goods which were liable for confiscation. (iv) As per the provisions of Rule 26 of the Central Excise Rules, 2002, as existing at the relevant period (September, 2002), any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules (emphasis supplied), shall be liable to a penalty not exceeding the duty on such goods or rupees ten thousand, whichever is greater. It is not the Department's case that the HR Trimmings removed by M/s. JISCO Ltd. were liable for confiscation. Furthermore, from the plain reading of Rule 26, it is manifest that penalty under Rule 26 is imposable if excisable goods have been rendered liable for confiscation under the Act or the Central Excise Rules, 2002. No contravention of the Central Excise Act or the Central Excise Rules, 2002 is alleged or averred against the Appellant. Thus, the invocation of the provisions of Rule 26 of the Central Excise Rules, 2002 against the aforesaid Appell....
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.... 15 invoices issued by M/s. JISCO Ltd. without receiving the goods mentioned in the invoices. At Para 34 of the impugned notice, it has been averred that the aforesaid three firms were liable for penalty under Rule 26 of the Central Excise Rules, 2002 as the consignments of HR Trimmings Scrap consigned to M/s. NSPL were diverted under their directions and sold to small scale manufacturers of down stream products like nails, pins, horseshoes, washers etc. The findings of the learned Deputy Commissioner are reflected at Para 51 of the Order dated 5-2-08. The learned Deputy Commissioner has imposed penalty under Rule 26 of the Central Excise Rules, 2002 on the basis that the above firms have taken active part in the modus operandi to connive and extend inadmissible credit To M/s. NSPL without delivery of excisable goods and by being in receipt of the impugned goods reached Gujarat and the relevant invoices reached NSPL. The findings of the learned Commissioner (Appeals) are i at Para 5.4 and Para 6 of the Order-in-Appeal dated 28-8-08. The order of the learned Deputy Commissioner has been upheld on the ground that this was a case of fraudulent availment of Cenvat credit based on ev....
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....excisable goods must have knowledge that they are liable for confiscation. The Hon'ble Tribunal had further held that wherein an assessee is only issuing invoices wherein there is no movement of goods, they cannot be visited with a penalty under Rule 209A. The aforesaid decision is squarely applicable to the facts of the present case as the case of Department is that only invoices have moved from M/s. JISCO Ltd. to M/s. Nashik Strips Pvt. Ltd. without the HR Trimmings. The duty paid nature of HR Trimmings is not in dispute and it is not the Departments case that the said HR Trimmings were offending goods which were liable for confiscation. The natural sequitur to the above is that the above three Appellants have not dealt with any goods which were liable for confiscation. Furthermore, neither the learned Deputy Commissioner nor the learned Commissioner (Appeals) have given any findings to the effect that the HR Trimmings were either confiscable or liable for confiscation. The learned SDR has referred to the decision of the Hon'ble Tribunal in the case of Dr. Writer's Food Products v. Commissioner of Central Excise, Pune-II - 2009 (242) E.L.T. 381 (Tri. - Mumbai) in support of his s....
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....in Para 7 :- "7. The second contention that because the firm is not a legal entity, it cannot be a person within the meaning of Section 8 of the Foreign Exchange Regulation Act or of Section 167(3), (8) and (37) of the Sea Customs Act, is equally untenable. There is of course, no definition of 'person' in either of these Acts but the definition in Section 2(42) of the General Clauses Act, 1897, or Section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which 'person' has been defined as including any company or association or body of individuals whether incorporated or not. It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), (8) and (37) of Section 167 of the Sea Customs Act are inapplicable to the appellant firm. In our view, the explanation to S. 23-C clearly negatives this contention. In that a company for the purposes in that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm means a partner in the firm. "(emphasis supplied) It is submitted that in the above judgment, ....
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....he Good being duty paid goods could not have been confiscated; (iv) The transactions are of September, 2002, whereas sub-rule (2) in Rule 26 of CER, 2002 was inserted and made effective with effect from 1-3-2007 no penalty therefore can be imposed under Rules 26(2) of CER, 2002; (v) There are no findings by the Commissioner (Appeals) on all these legal submissions made before him and had been completely ignored by Commissioner (Appeals). Without prejudice to the above submissions; it is submitted that there cannot be any penalty in the facts and circumstances of the case as: (i) The scrap is sold by the appellants adopting an online process as per normal business practice. The process and procedure of selling the scrap is open and transparent. (ii) The scrap is sold by the appellant on ex-factory basis and delivered to the purchasers at the factory gate on payment of duty on the vehicles supplied by or on behalf of the purchaser/successful bidder. (iii) On the successful bidder/dealers advice the name and address of the consignee are reflected in the Central Excise Invoice. The payment is received by cheque/DD. The appellants have discharged the statutory burden of payment of....
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.... can be penalized as per the Supreme Court decisions in the case of Agarwal Trading Corporation and Others reported in 1983 (13) E.L.T, 1467 (S.C.) and in the case of Sitaram Agarwal reported in 1999 (110) E.L.T. 292 (S.C.). [Emphasis supplied] 5.4 As is evident this judgement of Hon'ble Tribunal is based on Agarwal Trading Corporations Case, where in Para 7, the Hon'ble Apex Court held as under; 7. The second contention that because the firm is not a legal entity, it cannot be a person within the meaning of Section 8 of the Foreign Exchange Regulation Act or of Section 167(3), (8) and (37) of the Sea Customs Act, is equally untenable. There is of course, no definition of 'person' in either of these Acts but the definition in Section 2(42) of the General Clauses Act, 1897, or Section 2(3) of the Act of 1868 would be applicable to the said Acts in both of which 'person' has been defined as including any company or association or body. of individuals whether incorporated or not. It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence, as such clauses (3), (8) and (37) of Section 167 of the Sea Customs Act are....
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.... invoice issued by them the goods was liable for confiscation and hence M/s. JSW became liable for penalty under Rule 26 of ibid Rules. Further, as per Para 10 of SCN Shri Narendarbhai Khodabhai Patel, partner of M/s. Ambika Carriers stated as under: On being shown invoice No. 1204321/26-9-2002 issued by M/s. Jindal Steel & Alloys Limited, Vashind, Dist-Thane meant for consignee M/s. Nashik Strips (P) Limited, Plot No. 13 to 17, Shirdi Road, STICE, Sinnar, Dist. Nashik, he sated that their truck GJ-2T-6657 was not used for transportation of MS Scrape of above-said units. He further stated that during the material period, his trucks were in-transit between Mumbai to Mehsana, Carrying iron loose wire bundles' under consignment notes 069 dated 25-9-2002. In support of his say, he produced photocopies of the said consignment notes and one page of logbook of the truck GJ-2T-6657 duly signed by him. He further stated that said truck was never used for transportation of goods of M/s. Jindal Steel & alloys Limited, Vashind to M/s. Nashik Strips Private Limited. Sinnar; that they did not have any permit for transportation of goods within any places in Maharashtra State and hence they nev....
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....revenue that Bombay High Court has no jurisdiction to entertain the petition because the goods were discharged at Kandla, which is within the jurisdiction of Gujrat High Court in this case the Hon'ble High Court has ob served as under: 5. Another contention was raised on behalf of the Revenue that this Court has no jurisdiction to entertain the petition because the goods were discharged at Kandla and the adjudication order was passed at Kandla falling within the jurisdiction of Gujarat High Court. This submission is also without any merit because, in the instant case, the appellate order challenged in the petition has been passed by the authority at Bombay. In a similar case, being Writ Petition No. 3641 of 1987 [J.M. Baxi and Co. v. Dy. Collector of Customs, since reported in 2002 (4) Mh. L.J. 823] decided today i.e. 6-8-2001. We have held, that if a part of the cause of action has arisen within the jurisdiction of this Court, then the Writ can be entertained by this Court. In the present case; the appellate order challenged in the petition was passed at Bombay and accordingly this court will have jurisdiction to entertain the petition. 4. With regards to the submission of the c....
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....d order regarding the penalty against Shri K.K. Agarwal Director of NSPL. (C) M/s. Akshar Trading Co., M/s. Master Traders. M/s. Memon Associates :- The main contention of the appellants are that Rule 26 of the Central Excise Rules, 2002 permits imposition of the penalty on the person and not on the firm. Accordingly, the penalties on the firm cannot be imposed. But, in the case of Shrishti Impex Pvt. Ltd. v. Commissioner of Central Excise, Thane-I - 2008 (232) E.L.T. 210 (Tri. - Mumbai). It was held that corporate bodies can be penalized as per Supreme Court decision in the case of Agarwal Trading Corporation and Others reported in 1983 (13) E.L.T. 1467 (S.C). Further in the case of M/s. Twenty First Century Wire Rods Ltd. and Kundli Ispat Ltd. in Appeal No. E/268/09 & E/319/09 Vide Order No. A-264 to 269/09/EB/KC-1 dated 9-6-09 [2010(250) E.L.T. 94 (Tribunal), this Tribunal has held that a "person" under Rule 26 would include living as well as non-living person. Following the same ratio, I also confirmed the penalties against all the above appellants and impugned order is confirmed against these three appellants. (D) JSW Steel Ltd. :- The appellant is challenge the impugned ord....