TaxTMI 
TaxTMI 
2011 (3) TMI 133
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. CEA No.7 of 2010 has been preferred by the assessee under Section 35G of the Central Excise Act, 1944 against order dated 4.9.2009 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short "the Tribunal") claiming following substantial questions of law:- "i) Whether the Ld. Tribunal has passed the impugned order in violation of principle of natural justice? ii) Whether penalty under Rule 25 can be imposed by invoking ingredients of Rule 26? iii) Whether penalty prior to March, 2007 can be imposed upon a dealer when specific provision was inserted in Rule 26 w.e.f. 01.03.2007? iv) Whether penalty under Rule 25(1) (b) and 25(1)(d) can be imposed upon a dealer? ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble to pay penalty to the extent of the amount of benefit taken, the said provision was added with effect from 1.3.2007 which was after the allegedly wrongful act of the appellant. These contentions were not accepted and the appellant was held liable to pay penalty equal to the amount of alleged evasion of duty. The Appellate Authority i.e. the Tribunal observed:- "15. There could be no dispute on the proposition that the penal statue cannot be applied retrospectively. In respect of persons whose activities are clearly covered by the provisions of Rule 25, the penalties are imposable under the said Section. As regards penalty imposed on the persons under Rule 26, as their role is covered under unamended Rule 26 ( i.e. 26(1) in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....without even seeing the goods; the goods could be transported by ships and sale takes place on high sea sale basis. In such cases, the party who sells on high sea sale basis has purchased and sold but he has not taken possession or transported. It is a common knowledge that there are similar situations in domestic transactions of selling or purchasing. A Delhi based trader may order a consignment in Mumbai, but may transfer the consignment by sale to a party in Chennai and he may not take physical possession or be concerned about transporting. 16.2 The reliance has been placed on the extract from principles of statutory interpretation by Justice G.P.Singh, regarding retrospective operation of penal statutes and a submission was ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has been placed on the following orders:- (i) CEA No.56 of 2009 Commissioner of Central Excise Commissionerate, Chandigarh Vs. Sh. Ashish Gupta decided on 18.2.2010; (ii) Commissioner of Ex., Jalandhar Vs. Satish Metal Co. 2007(210) E.L.T. 341 (P&H); and (iii) CEA No.80 of 2006 Commissioner, Central Excise Commissionerate, Jalandhar Vs. M/s Ruby Impex, 1049, Industrial Area, Jalandhar decided on 10.2.2010. 6. Alternatively , it was submitted even if the appellant was liable to pay duty it did not stand on the same footing as person who wrongly availed of the credit and doctrine of proportionality was required to be applied by taking into account the extent of culpability. In this regard reliance has been pl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ure referred to in clause (a) or clause (b) or clause ( c) or clause (d) has been committed, or [rupees two thousand] whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice." " R ule 26:- Penalty for certain offences: (1) 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, shall be liable to a penalty not exceeding the duty on such goods or [two thousand rupees], whichever is greater. &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvat credit was taken. In such a case, rule 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged. We are, thus, unable to hold that appellant was not liable to pay any penalty. 11. As regards alternative submission of the appellant, that even if there is jurisdiction to levy penalty equal to the amount of duty evaded distinction in culpability may be found in pers....