Case Law Details
Rajesh Kumar Narula Vs C.C.E. & S.T. (CESTAT Ahmedabad)
CESTAT find that there is no dispute about the fact that the period involved in the present case is 2004-05. The offence of issuing bogus LR can at the most fall under the provision of Rule 26(2) of Central Excise Rules, 2002. However, the said provision has come into effect from 01.04.2007 as per the notification no. 08/2007 dated 01.03.2007 therefore, penalty for the offence like issuance of bogus LR shall not attract penalty at the relevant time.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
This appeal is directed against Order-In-Appeal passed by Commissioner (Appeals) whereby, the penalty imposed on the appellant under Rule 26(2) was upheld in connection with facilitating fraudulent availment of cenvat credit by M/s. RHJ Extrusion by issuing bogus LRs whereas, goods have not been transported under that LR.
02. Shri V.R. Sethi, learned counsel appearing on behalf of the appellant at the outset submits that in the present case the period involved is 2004-05 and at that relevant time there was no provision for penalty under Rule 26(2) which was inserted only by notification no.08/2007 dated 01.03.2007 (w.e.f. 01.04.2007) therefore, merely for issuance of bogus LR will not attract penalty under Rule 26(1) at the most it will fall under Rule 26(2) which was not in existence at the relevant time. On identical issue in the appellant’s own case this tribunal vide Final Order No. A/10839/2019 dated 25.04.2019 set aside the penalty and allowed the appeal.
03. Shri Kalpesh Shah, learned Superintendent (AR) appearing for the revenue reiterates the finding of the impugned order.
04. We have carefully considered the submissions made by both the sides and perused the records. We find that there is no dispute about the fact that the period involved in the present case is 2004-05. The offence of issuing bogus LR can at the most fall under the provision of Rule 26(2) of Central Excise Rules, 2002. However, the said provision has come into effect from 01.04.2007 as per the notification no. 08/2007 dated 01.03.2007 therefore, penalty for the offence like issuance of bogus LR shall not attract penalty at the relevant time. In the identical issue in the appellant’s own case has been considered by this tribunal and passed the following order dated 25.04.2019 (supra):-
The issue involved in the case is that appellant was involved in issuance of bogus LRs for transport of copper from Delhi to M/s Star Tubes & Metals Pvt. Ltd, Waghodia in respect of the consignment which were not delivered to the assessee who avail the fraudulent cenvat credit, accordingly, penalty of Rs. 1 Lakh was imposed on the appellant under Ruler 26 of Central Excise Rules, 2002.
2. None appeared for the appellant.
3. AR appearing for the Revenue reiterates the findings of the impugned order.
4. Considering the submission made by Ld. AR and perusal of the records, we find that the period involved is prior to 01.03.2007 during which the Rule 26 reads as under:
“Rule 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 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.
5. From the plain reading of the Rule 26, it is clear that merely for making bogus LRs, the action of the appellant does not fall as an offence under Rule 26. The rule 26 was subsequently amended from 01.03.2007 effective from 01.04.2007. Since the period involved is prior to the said amendment, the penalty under Rule 26 cannot be imposed only for issuance of bogus LRs. This issue is covered by the judgment of Hon’ble Punjab High Court in case of Mini Steel Traders 2014 (309) ELT 404 (P&H) and judgment of Hon’ble Bombay High Court in case of Ramesh Kumar Rajendra Kumar & Co. 2015 (325) ELT 506 (Bom.). Accordingly, we set aside the penalty imposed on the appellant and allow the appeal.
From the above judgment, it can be seen that identical facts and the issue is involved, this tribunal considering the judgment of Hon’ble Bombay High Court in the case of RAMESH KUMAR RAJENDRA KUMAR & CO.- 2015 (325) ELT 506 (Bom.) held that since the period involved is prior to amendment to Rule 26 effective from 01.04.2007, the penalty under Rule 26 cannot be imposed only for issuance of bogus LRs therefore, following this tribunal decision dated 25.04.2019 in the present case also, the penalty is not sustainable hence the same is set aside. Appeal is allowed.
(Pronounced in the open court on 28.11.2022)
