Case Law Details
Steel & Metals Co Vs C.C.E. & S.T. (CESTAT Ahmedabad)
Introduction: The case of Steel & Metals Co. vs. C.C.E. & S.T. (CESTAT Ahmedabad) revolves around alleged CENVAT invoicing violations. The appellant, Steel & Metals Co., is accused of playing a crucial role in the commission of offenses by M/s G.K. Founders. The charges include issuing CENVAT invoices without the actual delivery of goods, which were then shown as cleared to M/s G.K. Founders. The case raises questions about penalty imposition under Rule 26 of the Central Excise Rules, 2002.
Detailed Analysis: The key contention is whether the appellant, being aware of the non-existence of goods, is liable for confiscation. Rule 26 applies to individuals involved in transporting, removing, depositing, or dealing with excisable goods, knowing the potential confiscation consequences. The appellant’s active participation in facilitating the passage of incorrect CENVAT credit is a central concern. While the appellant argues against confiscation, their involvement in issuing invoices without actual goods delivery is considered a violation.
The case cites relevant precedents, including Ekta Enterprises, CCE Pune-I vs. Keetex, and Ballary Steel & Alloys Ltd., emphasizing that penalties under Rule 26 can be upheld even without goods confiscation. The argument that penalties cannot be imposed on companies is dismissed based on the Supreme Court’s ruling in Madhumilan Syntex Ltd. vs. Union of India, establishing corporate criminal liability.
For Shreeji Aluminium Pvt. Ltd. and Shri Paresh Babubhai Patel, the evidence suggests their active involvement in facilitating fraudulent CENVAT credit. The Gujarat High Court’s decision in Sanjay Vimalbhai Deora v. CESTAT supports the imposition of penalties even without proposed confiscation. The Punjab & Haryana High Court’s ruling in Vee Kay Enterprises v. CCE further reinforces the applicability of Rule 26.
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