TaxTMI 
TaxTMI 
2016 (1) TMI 524
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....le to CETA 1985 and are registered with Central Excise department, discharging Central Excise duty and also availing cenvat credit. An offence case was registered against the assessees by the Headquarters (Preventive), Central Excise Commissionerate on the allegation that the main appellant viz. M/s.Sujana Metal Products Ltd. in order to avail ineligible and irregular cenvat credit entered into a conspiracy with M/s. Victoria Steel Enterprises Ltd., M/s.Future Tech Industries Ltd., M/s.Endeavour Industries Ltd. & M/s.Omnicron Bio-Genesis Industries Ltd. (co-noticees) who are Central Excise Registered Dealers. It is alleged that the appellant-assessee availed ineligible and irregular credit of duty paid on MS scrap as if it was supplied by M/s.Victoria Steel Enterprises Ltd. based on the documents prepared indicating bogus transaction particulars, without actual/physical movement of the M.S. Squares said to have been used in the manufacture of TMT bars thereby contravened the provisions of Rule 4 (1) of Cenvat Credit Rules, 2004. Accordingly, a show cause notice dt. 3.11.2008 was issued to the main appellant viz. M/s.Sujana Metal Products Ltd. demanding irregular availment of cenvat....
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....trictly construed contained in a particular manner as it was prescribed and it is a mandatory provision. He further submits that respondents are liable for penalty both under Rule 15 (i) as well as under Rule 15A. 4. On the other hand, Ld. Advocate appearing for all the appellant-assessees submits that they are entitled to reverse the cenvat credit even under normal circumstances if the credit is wrongly taken. He further submits that they have not violated any of the provisions of Central Excise law and procedures and he particularly drew our attention to Rule 4 (1) of CCR. It is only a condition set out for availing the credit. It is not violation of the said rule. The rule only stipulates that assessee has to take credit on the inputs immediately on receipt of the same. He also admits that there is a violation to avail some other benefit i.e only to avail financial credit facility with the bank and to show balance turnover in their books of accounts. But for this there is no violation, there is no intention to evade payment of duty under Central Excise law. He submits that Rule 14 is not applicable for imposition of penalty as Rule 14 relates to a situation where there is con....
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....hkula 2011 (273) ELT 513 (Tri.-Del.) 7. Countering to this rejoinder, Ld. Advocate submitted that their case is first they debited the credit even though goods were not removed, but the same was taken back which was otherwise available to them on the inputs i.e. MS Squares and there is no violation of any of the Central Excise Rules. Under these circumstances penalties are not sustainable and cases relied upon by Revenue are not applicable to this case. 8. We have carefully considered the submissions of both sides and perused the records. Out of these six appeals, five are by assessee where the appellant-assessee filed appeals against imposition of penalties by the adjudicating authority and the Revenue is on appeal against dropping of demand and regularising the cenvat credit. On perusal of the SCN, proceedings and the impugned order, we find that the adjudicating authority has discussed the issue in detail. The period of dispute is from February 2007 to May 2008. He dropped the proposal for recovery of cenvat credit, however imposed penalty. The issue to be decided in these appeals is whether the appellants-assessees violated the provisions of Central Excise Act and Rules f....
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....p; OMICRON Rs.10,94,722/- (318.660 MTs) As seen from the above sequence, we find that the main assessee (SMPL) have prepared the documents i.e. cenvat invoices for clearance of M.S. squares in the name of M/s.M/s.Endeavour Industries Ltd., M/s.Omnicron Bio Genesis Ltd. and M/s.Future Tech Industries Ltd. who are central excise registered deales who in turn prepared sale documents showing sale to Victoria for the entire quantity covering the three dealers. M/s.Victoria raised invoices in f....
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.... We find the appellant indulged in the entire transaction and created cenvatable documents and manipulated to show higher sales turn over in their books of accounts and to show to the financial institutions, banks etc. Apparently, we find there is no allegation on the bonafide of the original credit first debited by the appellants in this chain of events. It is the SMPL who created the chain by way of paper transaction of sale and transfer of goods and again the main appellant received back the same as receipt from the registered dealer. We find that every dealer in this transaction had immediately neutralized the credit in respect of the entire quantity shown in the documents. Therefore, we find that appellants intentionally used the central excise provisions under Rule 4 (1) of CCR, created cenvat documents and debited duty without physical movement of goods and in turn took back the credit without receipt of any goods, which is clear violation of Central Excise Act and Rules. Appellants have deliberately chosen this novel method of violating Central Excise Rules and CCR. The Central Excise Act and the Cenvat Credit Rules are intended to facilitate and benefit every manufacturer ....
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....ed by orders of this Court referred to above which are not shown to be distinguishable. Accordingly, we hold that the amended provisions will not apply to the acts committed prior thereto. 10. In spite of?non-applicability of Rule 26(2), penalty could be levied as the appellant was concerned in selling or dealing with the goods which were liable to confiscation inasmuch as the appellant claimed to have sold the goods in respect of which the cenvat 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....
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....le that the punishment must be proportioned to the offence is of universal application and is required to be followed save where the statute bars the exercise of discretion either in awarding punishment or releasing an offender on probation in lieu of sentencing him forthwith. 11. In the course of the arguments, the ld. Advocates appearing for the appellants have merely highlighted the facts that the appellants in process of issuing invoices and passing on the credit, got enriched only to the extent of 1 to 3% of the credit passed on and that, therefore, they cannot be held to be equal partners in the commission of offence. That gravity of offence or violation of provisions of law does not depend upon the actual benefit that the offender obtains from his illegal acts. Gravity of offence essentially depends upon the nature of violation of the provisions of law and its effect in general. There may be cases where violation of the provisions of law may not enure to any individual benefit to the offender. Can it be then said that such offender cannot be penalised at all? Being so, merely because the monetary benefit differs from offender to offender in relation to the offence r....