Penalisation under Rule 26 of Central Excise Rules, Allowable only if Party is Involved in Various Activities of Handling Goods, Which are Liable for Confiscation: CESTAT [Read Order]
![Penalisation under Rule 26 of Central Excise Rules, Allowable only if Party is Involved in Various Activities of Handling Goods, Which are Liable for Confiscation: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/08/Central-Excise-Rules-Central-Excise-Party-is-Involved-in-Various-Activities-of-Handling-Goods-Handling-Goods-CESTAT-Taxscan.jpg "Penalisation under Rule 26 of Central Excise Rules, Allowable only if Party is Involved in Various Activities of Handling Goods, Which are Liable for Confiscation: CESTAT [Read Order]")
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the Penalisation under Rule 26 of Central Excise Rules is allowed only if party is involved in various activities of handling of goods, which are liable for confiscation. In respect of all the appellants a penalty under Rule 26 was imposed in connection with the case against M/s Nitin...
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that the Penalisation under Rule 26 of Central Excise Rules is allowed only if party is involved in various activities of handling of goods, which are liable for confiscation.
In respect of all the appellants a penalty under Rule 26 was imposed in connection with the case against M/s Nitin Alloys Global Ltd. on which there is a charge that M/s. Nitin Alloys Global Ltd has taken the credit without receipt of the goods. The charge against the present appellant is that they have facilitated for availing a fraudulent Cenvat credit to M/s Nitin Alloys Global Ltd, in their capacity of transporter, CHA, High Seas Seller. The penalty was imposed under Rule 26(2)(ii) of Central Excise Rules, 2002.
Parth Mullick, counsel, appeared on the behalf of the appellants at the outset submitted that admittedly the penalty was imposed under rule 26(2)(ii) of Central Excise Rules, 2002, which came into effect only on 01.04.2007, whereas the period in the present case is 2005-06. Therefore, the penalty is not sustainable on this ground alone as the Rule 26(2)(ii) cannot be applied retrospectively.
P.K. Singh, Superintendent (AR) appeared on behalf of the revenue reiterated the findings of the impugned order.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “From the reading of the Rule, it can be seen that a person can be penalized under this rule, only if he is involved in various activities of handling of goods, which are liable for confiscation”.
“In the present case the entire case of the department is that there is no movement of goods but it is a paper transaction and the M/s Nitin Global Ltd, who has taken Cenvat credit, has not received the goods. When this is the case of the department as no goods is involved, consequently, none of the appellants are engaged in handling the goods which is liable for confiscation” the Tribunal concluded.
To Read the full text of the Order CLICK HERE
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