ABHAY GUPTA Vs. COMMISSIONER OF CENTRAL EXCISE, FARIDABAD

JUDGEMENT

(1.) BOTH the stay petitions are being disposed of by a common order as they arise out of the same impugned order passed by Commissioner vide which, while confirming demands of duties against M/s. Lauls Limited, the has, inter alia, imposed penalties of Rs. 10,00,000/ - upon Shri Abhay Gupta, Director of M/s. Lauls Limited and of Rs. 10,00,000/ - on Shri Ram Bilas Bansal, a broker, under the provisions of Rule 26 of Central Excise Rules, 2002. We find from the impugned order of Commissioner that out of the total confirmed demand of Rs. 94.17 lakhs approximately, M/s. Lauls have already deposited an amount of Rs. 93.94 lakhs approximately. Inasmuch as the company has deposited the duty confirmed against them, we deem it fit to dispense with the condition of pre -deposit of penalties imposed upon one of the Directors i.e. Shri Abhay Gupta.

(2.) AS regards penalties of Rs. 10,00,000/ - on Shri Ram Bilas Bansal, we find that the said penalty stand imposed upon them on the ground that he connived with M/s. Lauls Limited in obtaining the cenvatable invoices without goods from the registered dealers on commission basis. The appellant's contention is that he only contacted the dealers and introduced them to M/s. Lauls Limited for the purpose of buying the raw material. If the dealers have issued only invoices without supply of raw materials, he cannot be held liable to penalty. It also stands contended before us that penalty has been imposed under Rule 26, without referring to any sub -rule. In any case, the provisions of Rule 26 were amended w.e.f. 1 -3 -07 bringing a person abetting in making documents etc. on the basis of which the other person can take the Modvat credit. Inasmuch as the period involved in the present appeal is prior to 1 -3 -07, when the abetment was not punishable under the said rule, the imposition of penalty by the Commissioner is not justified. Reliance also stands placed on the Hon'ble Punjab & Haryana High Court's decision in the case of Vee Kay Enterprises v. C.C.E. reported in : 2011 (266) E.L.T. 436 (P & H). The relevant para 9 of the said decision read as under: -