No Penalty u/r 26 of Central Excise If Superintendent Revises Returns in Bona Fide Belief Without Evidence of Collusion: CESTAT [Read Order]
CESTAT ruled that a superintendent cannot be penalised under Rule 26 of Central Excise Rules if return revisions were made in good faith without evidence of collusion or wrongful intent.
![No Penalty u/r 26 of Central Excise If Superintendent Revises Returns in Bona Fide Belief Without Evidence of Collusion: CESTAT [Read Order]](https://images.taxscan.in/h-upload/2025/07/08/2061386-no-penalty-cestat.webp "No Penalty u/r 26 of Central Excise If Superintendent Revises Returns in Bona Fide Belief Without Evidence of Collusion: CESTAT [Read Order]")
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a penalty under Rule 26 of the Central Excise Rules, 2002, cannot be imposed on a superintendent if the revision of returns was done under a bona fide belief without any evidence of collusion or extraneous consideration. Shree Kedar Nath Vishwakarma, the appellant, was a...
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a penalty under Rule 26 of the Central Excise Rules, 2002, cannot be imposed on a superintendent if the revision of returns was done under a bona fide belief without any evidence of collusion or extraneous consideration.
Shree Kedar Nath Vishwakarma, the appellant, was a Superintendent of Central Excise and Service Tax at Bokaro from April 2015 to June 2017. The department alleged that he had facilitated Shri Ram Alloys and Ingots Pvt Ltd in availing irregular CENVAT credit of Rs. 2.55 crores by revising their ER-1 returns for August to November 2016, which allowed the company to use excess credit compared to previous periods and imposed a penalty of Rs. 25 lakhs.
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The appellant’s counsel argued that disciplinary proceedings against the appellant had concluded with a finding that the revisions were made under a bona fide belief based on the assessee’s representations, and there was no evidence of deliberate misconduct or extraneous consideration. The penalty was unjustified.
The revenue’s counsel argued that the appellant had exceeded his authority by making substantial changes in the ER-1 returns, including altering the opening balance of the CENVAT credit for September 2016 because the August return could not be revised, facilitating the assessee’s wrongful claim of excess credit, which amounted to abetment.
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The two-member bench comprising Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) observed that although the appellant made revisions to the returns, resulting in the assessee’s excess CENVAT credit.
The disciplinary authority had found that the appellant’s actions were not deliberate and were done under the bona fide belief that the assessee’s claim was correct, and there was no allegation of extraneous benefit.
The tribunal further observed that the act was a mistake rather than collusion, and the appellant could not be said to have abetted the wrongful availment of credit. The tribunal held that under these circumstances, the penalty of Rs. 25 lakhs imposed under Rule 26 was not sustainable. The penalty was set aside, and the appeal was allowed with consequential relief.
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