Case Law Details
Pranatharthiharan Sridharan Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
From the plain reading of Rule 15(1), we find that a person shall be liable to penalty who takes or utilize Cenvat credit in respect of input or capital goods or input services wrongly or in contravention of any of the provisions of these Rules. In the facts of the present case, it is M/s. Diamond Power Transformers Limited who has availed fraudulent Cenvat credit, the appellant being employee Director has not availed Cenvat credit for himself therefore, Rule 15(1) is not applicable on the person who has neither availed Cenvat credit nor is the beneficiary of Cenvat credit. Accordingly, penalty under Rule 15(1) was wrongly imposed on the appellant.
A plain reading of the said Rule 15 of CCR, 2004, reveals that it consists of five sub-rules for different situations and none of these sub-rules directs imposition of personal penalty on the employees of an erring assessee under the said rule. Besides, there is no mention of the relevant sub-rule, as applicable to the appellants, in the notice nor confirmed in the order. It is a settle principle of law that penal provisions need strict interpretation and a person could only be able to defend his case only when the particular provision under which he is proposed to be penalized, is mentioned in the notice itself.
CESTAT held that penalty under Rule 15(1) on the present appellant, who is merely an employee of the Company, is not sustainable.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
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