2025 (6) TMI 590

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....umbai South Commissionerate and rejected the appeal filed by the appellant. 2. The sole issue for consideration herein is whether, in the facts and circumstances of the case, the authorities below are justified in imposing penalties under Rules 25(1) & 26(1) of Central Excise Rules, 2002 and Rule 15(1) & 15A of Cenvat Credit Rules, 2004? 3. The appellant a registered dealer under the Central Excise Act, 1944 is engaged in the import & trading of Iron & Steel products such as S.S. Scrap, sheets, pipes, coils etc. A search was conducted on 9.10.2015 at appellant's godown at Bhiwandi and upon verification no physical stock of excisable goods, as reflected in their records, was found therein. Mr. Nikhil H. Kanungo, Proprietor of the appel....

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....nalty of Rs. 10,61,166/- (Rupees Ten lakhs Sixty one Thousand Sixty only) equivalent to the Cenvat Credit /duty on the excisable goods, under Rule 25(1) of the Central Excise Rules, 2002. (iv) I impose a penalty of Rs. 2000/- (Two Thousand Only) against the notice under Rule 15(1) of the CENVAT Credit Rules, 2004; (v) I impose penalty of Rs.5000/- (Five Thousand only) under Rule 15A of the CENVAT Credit Rules, 2004." 5. Aggrieved, the appellant filed appeal before the learned Commissioner (Appeals) who rejected the same and confirmed the findings of the Adjudicating Authority. 6. I have heard learned counsel for the appellant and learned Authorised Representative on behalf of Revenue and perused the case records incl....

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....Delhi High Court (supra) the lower authorities are not justified in imposing penalty u/r 25 ibid and the same is accordingly set aside. Moreover, the show cause notice does not propose a penalty u/r 25 ibid thus the imposition of penalty amounts to going beyond the scope of show cause notice which is not permissible in law. Although learned Authorised Representative argued that non mentioning of provisions of law in the show cause notice does not vitiate the proceedings but in my view the said argument of Revenue is against the settled legal position that adjudicating authorities cannot go beyond the show cause notice. 8. As regards the penalty u/r. 26 ibid. is concerned, Rule 26 (1) provides that "Any person who acquires possession of, ....