Vishal Jain Vs C.C.E. (CESTAT Ahmedabad)
CESTAT Ahmedabad held that penalty under rule 26 of Central Excise Rules rightly imposed on the Chartered Accountant who issued false performance certificate to fraudulent parties based on which fraudulent advance license were obtained.
Facts- The company M/s. Iqbal Synthetics Pvt. Ltd. have cleared the goods from their EOU clandestinely under the guise of removal of the goods against advance license without payment of duty. For the purpose of advance license, the appellant who is a Chartered Accountant had issued performance certificate to M/s. Thejavathu Chandrakala, M/s. Eastern Products, M/s. Devashree processors and M/s. Amba Expofab without verifying their credentials and on that basis the DGFT had issued advance license to the said parties which were subsequently, misutilized leading to evasion of Government revenue to the tune of rupees more than Rs. 10 Crores of excise duty therefore, the appellant was imposed penalty of Rs. 5 lacs under Rule 26 of Central Excise Rules, 2002.
Conclusion- We find that the appellant have admittedly issued false performance certificate to fraudulent parties who, on the basis of the said certificates obtained the advance license and such advance licenses were used for evasion of huge excise duty on the clearance of goods clandestinely from the EOUs. Without the performance certificate, the fraudulent advance license could not have been issued and huge revenue loss could not have occurred to the government exchequer. Therefore, for the entire offence the appellant’s role is key role.
Held that the appellant has been rightly imposed with a penalty under Rule 26 of Central Excise Rules. Accordingly, we do not find any infirmity in the impugned order to the extent of penalty of Rs. 5 lacs was imposed upon appellant under Rule 26. Therefore, the penalty is upheld. Appeal is dismissed.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that the company M/s. Iqbal Synthetics Pvt. Ltd. have cleared the goods from their EOU clandestinely under the guise of removal of the goods against advance license without payment of duty. For the purpose of advance license, the appellant who is a Chartered Accountant had issued performance certificate to M/s. Thejavathu Chandrakala, M/s. Eastern Products, M/s. Devashree processors and M/s. Amba Expofab without verifying their credentials and on that basis the DGFT had issued advance license to the said parties which were subsequently, misutilized leading to evasion of Government revenue to the tune of rupees more than Rs. 10 Crores of excise duty therefore, the appellant was imposed penalty of Rs. 5 lacs under Rule 26 of Central Excise Rules, 2002.
02. Shri R. Subramanya, learned Counsel appearing on behalf of the appellant submits that the appellant have acted as a professional under bona fide belief. He submits that the appellant has charged nominal fees of Rs. 1500/- for certificate and he was not aware of any misuse of the certificate therefore, he should not be penalized under Rule 26. He further submits that the appellant have not dealt with any goods which is liable for confiscation. Moreover, there is no charge of confiscation of goods in the show cause notice as well as in the order therefore, without charge for confiscation of goods, the penalty under Rule 26 cannot be imposed.
03. Shri G. Kirupanandan, learned Assistant Commissioner (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. He pointed out from the records that the appellant have not admitted the offence moreover, he has admitted that if he would have known such gravity of the revenue involved, he would have charged more as against the Rs. 1500/- per certificate. This clearly shows mala fide of the appellant. He submits that for the identical offence the High Court of Bombay as well as this tribunal has confirmed the penalty in the following judgments:-
