TaxTMI 
TaxTMI 
2022 (8) TMI 495
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....se Appeals No.70077 of 2021, No.70078 of 2021 & No.70079 of 2021 are also listed today. With the consent of rival parties and in the interest of justice, I take up all the appeals together for final hearing while accepting the application for early hearing and dismissing the application for stay being in-fructuous. 3. Learned Authorized Representative for the Department submits that on the basis of intelligence that M/s Preet Machines Ltd. (hereinafter referred to as M/s PML) are availing CENVAT credit fraudulently on the basis of only invoices without actual receipt of material. Several premises of the appellant and their Directors and others were raided. From the residential premises of the Chairman of M/s PML Shri Kuldeep Singh unaccounted sale proceeds of Rs.17 lakh was found. From the residential premises of Shri Ritesh Kapoor, working as broker/agent for arranging cenvatable invoices, Rs.3.24 Crore of unaccounted cash was found. In the statements recorded Shri Ritesh Kapoor accepted that he was involved in arranging cenvatable invoices without actual supply of material for M/s PML for the past 5 years; he was interacting with Shri Preet Singh Chauhan and Shri Gurmeet Singh C....
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....as been accounted for by M/s PML the same is not liable for confiscation and accordingly no penalty can be imposed on these three appeals of Shri Ritesh Kapoor, Shri Gurmeet Singh & Shri Preet Singh. 6. Learned counsel further submits that Section 121 of the Customs Act, 1962 as made applicable to central excise is not applicable to the impugned cash seized. The Adjudicating Authority has categorically found that the main allegation of show cause notice is that there was no movement of goods and invoices were issued without payment of goods and CENVAT credit was fraudulently availed on the same and as such the cash seized cannot be said to be sale proceeds of excisable goods. He further submits that the Appellate Authority has also found that show cause notice being based on allegation of availing admissible credit tax invoice involved no movement of goods, the cash seized cannot be limited to sale proceeds of excisable goods. Learned counsel further submits that the Department has not challenged the dropping of penalty of M/s PML and Shri Preet Singh & Shri Gurmeet Singh. He submits that learned Adjudicating Authority finds that there is no allegation that Central Excise Rules 20....
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....Shri Preet Singh, Director of M/s PML and from the residence of Shri Ritesh Kapoor alleged broker/agent for cenvatable invoices. I find that the Department in addition to proposing the confiscation of the seized cash seeks to impose penalty under Rule 26 of the Central Excise Rules 2004 invoking the provision of Section 121 of the Customs Act, 1962 as made applicable to Central Excise vide Notification No.68/63 dated 04 May, 1963 as amended. The Department also seeks to impose penalties. Going to the imposition of penalty under Rules 26 of Central Excise Rules, 2004, I find that the rule is as follows:- RULE Penalty 26 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. [Provided that where any proceeding for the person liable to pay duty have been concluded under clause (a) or clause (d) of ....
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....eof shall be liable to confiscation." This section of the Customs Act provides power to confiscate sale proceeds of the smuggled goods. In the Central Excise Act 1944 such cash can be confiscated under the said section only if it is consideration for sale of goods, where sale has occurred in violation of Central Excise Act 1944 or the rules made there under, but in this case no sale of goods have occurred as the SCN is based on allegations of availing inadmissible credit on the basis of bogus invoices involving no movement of goods. 43. I also observe that the hon'ble Punjab and Haryana High Court dismissed the revenue appeal in the case of Commissioner VsPatran Pipes (p) Ltd [2013 (290)ELTA88(P&H)], wherein cash of Rs 1,45,000/- was seized on account of sale proceeds of the goods removed clandestinely, as there was no cogent evidence to record that the seized money had nexus with the clandestine removal... Further the hon'ble CESTAT in their decision in the case of Bhagwan R.Daswani Vs C CE,Mumbai [2010(262)ELT822(Tri.Mumbai), in para 7 have held as under: "7.Summing up the above discussion would show that whole amount seized could not have been the sale proceeds and dep....