2014 (1) TMI 779

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....se applications filed by the appellants seek waiver and stay in respect of the adjudged dues. There is a penalty of Rs. 4,00,000/- on the company(dealer) under Rule 25 of the Central Excise Rules 2002 read with Section 11AC of the Central Excise Act and a penalty of Rs. 40,000/- on one of the Directors of the company under Rule 26 of the Central Excise Rules 2002. On a perusal of the records, I fi....

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.... contravened Rule 11 by issuing invoices without goods. The learned Superintendent (A.R.) relies on M/s Vee Kay Enterprises Vs. Commissioner of Central Excise [2011(266)E.L.T. 436 (P&H)] wherein Rule 25(1)(d) and Rule 26(1) were held to be applicable to a dealer who claimed to have sold goods under cover of 'cenvatable' invoices but did not actually supply the goods. The learned Superintendent(A.R....

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....ich Sub-rule (2) of Rule 26 came into force providing a penalty for a dealer issuing 'cenvatable' invoices without goods. This provision was not invoked in the show-cause notice against the appellant-company (registered dealer). The question whether, in lieu of Rule 26(2), Rule 25(1) could be invoked against the dealer has been debated before me at length. On a perusal of the provisions of Rule 25....

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....any. In the case of M/s Vee Kay enterprises, Hon'ble High Court held that Rule 25(1)(d) could be applied to a person who was concerned in selling or dealing with goods which were liable to confiscation. This view was taken in proceedings where the department proposed to penalize not only the dealer who issued invoices without goods but also his customer who took CENVAT credit on the basis of such ....