TaxTMI 
TaxTMI 
2008 (2) TMI 75
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....t arise for consideration are that the appellant company herein sells scrap generated in the factory premises by way of auction to the highest bidder, in e-auction at M/s. Steel Rx. After such sale of scraps on auction, the appellant company cleared the said steel scrap to various persons as was directed by the highest bidder. While removing such scrap the appellant prepares the invoices and discharges the duty liability. It is the case of the Revenue that the invoices as prepared by the appellant company for the dispatch of the goods is to a particular person, but the goods are not delivered to such person and in fact are diverted to some other persons. After coming to such conclusion it was held that the appellant company is liable ....
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....ing the penalty on the appellant, reduced the same. The finding of the learned Commissioner (Appeals) are as under: "The issue has been spelt out in Show Cause Notice issued by DGCEI under F. NO. DGCEI/MZU/I&ISD/12 (3) 13/Part-2/04 dated 02/05/2006. The appeal is for waiver of penalty, I found that appellant issued so many invoices to parties, without receiving any direct orders from them. Goods had been sold to trader on the basis of auction and hence the goods ought to have been consigned to the traders, but, appellant issued invoices against various parties, thus this modus facilitated mis-use of Cenvat Credit. Therefore, the original authority has considered it right to impose penalty. However, considered the fact t....
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....e liable for confiscation. It is his submission that once duty liability is discharged, there cannot be any reason or belief that the said goods would be liable for confiscation. Without prejudice to the above submission it was submitted that the appellant company is a limited company cannot be penalized under the provisions of Rule 26 which is para materia to Rule 209A of erstwhile Central Excise Rules, 1944. For this proposition he relies upon the decision of the larger bench in the case of Steel Tubes of India Ltd., vs. Commissioner of Central Excise, Indore 2007 (217) ELT 506. It is his further submission that the amendment to Rule 26 by Notification No. 8/2007-CE(N.T.) dated 01/03/2007 will not be applicable in this case, a....
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.... the person who is situated in Gujarat. It is his submission that the appellant company is aware that the transporting of the goods was taking place by trucks which are not allowed to enter into Maharashtra. Hence it is his submission that the penalty amount which has been reduced by the Commissioner (Appeals) is incorrect and the penalty imposed by the adjudicating authority should be restored. 7. Considered the rival submissions. It is necessary to reproduce the provisions of Rule 26 of the Central Excise Rules, 2002. "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 ....
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....ny when the scrap was removed from the factory premises. Once duty liability is discharged on the scrap which is removed from the factory gate, the appellant company is in no way concerned with whether the scrap is going to the place destined as per invoice or to any other place other than the destination. The submission of the learned counsel merits consideration that the appellant company cannot be held to have knowledge or reason to believe that the said goods are liable for confiscation on the face of the fact that invoices were issued and the duty liability has been discharged. It was the submission of the learned counsel that transportation of the scrap was not the responsibility of the appellant company and it was the res....