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CX - CENVAT - Improper dimension of goods mentioned in invoices - no malafide intention can be attributed but this does not mean that penalty needs to be set aside - Penalty u/r 26 of CER, 2002 reduced: CESTAT

By TIOL News Service

MUMBAI, MAY 25, 2016: A penalty of Rs.1,00,000/- imposed u/r 26 of CER, 2002 was upheld by the lower appellate authority and against this order the appellant is before the CESTAT.

It is the case of the department that the appellant had issued "only” the invoices for availment of CENVAT credit by M/s. Cethar Vessels Pvt. Ltd.

Incidentally, the main noticeesettled their case by paying the excise duty and other penalties as well as the interest.

It is, therefore, submitted by the appellant that they being a co-noticee should be exonerated from payment of any penalty. The appellant relies on the amendment made in rule 26 of the CER, 2002 by the Union Budget, 2016 [ 8/2016-CE(NT) refers] wherein it is provided that penal proceedings against co-noticee shall be deemed to be concluded.

The Bench observed -

"6.1 On perusal of the records, I find that the adjudicating authority has imposed penalty of Rs. 1,00,000/- on the appellant. The lower authorities have come to a conclusion that appellant have not mentioned any dimensions of goods supplied hence there was malafide intentions. I find that there may be no malafide intentions but may be due to some genuine reason on the part of the appellant, improper dimensions may have been mentioned on the invoices. This would not mean that the penalty needs to be set aside as there is contravention of rules. While upholding the penalty on the appellant I reduce the penalty from Rs. 1,00,000/- to Rs. 50,000/- and dispose of the appeal as indicated herein above."
 

(See 2016-TIOL-1237-CESTAT-MUM)


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