ASHOK VERMA Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THE appellant is a Director of M/s. Asha Telecom Pvt. Ltd. engaged in manufacture of telephone parts. One of their raw materials is H.R. Sheets. The allegation against the appellant -company is that during 2004 -2005, 2005 -2006, they took Cenvat credit of Rs. 8,19,043/ - on the basis of 29 invoices issued by M/s. Sagarika Trading Company, M/s. Ayushi Steel Company Pvt. Ltd. and M/s. Bhagwati Trading Company, all registered dealers. The department conducted investigation in respect of the registered dealers from whom the H.R. Sheets are claimed to have been purchased and was found that they have issued bogus invoices without supplying any materials. On this basis inquiry was made in respect of M/s, Asha Telecom Pvt. Ltd. and in this regard, statement of Shri Ashok Verma, Director was recorded wherein he admitted that the Cenvat credit of Rs. 8,19,043/ - has been taken on the various 29 bogus invoices issued by the above registered dealers without receiving any material. On this basis a show cause notice was issued for recovery of the abovementioned wrongly taken Cenvat credit from M/s. Asha Telecom Pvt. Ltd., imposition of penalty on the registered dealers and also for imposition of penalty on Shri Ashok Verma, Director of M/s. Asha Telecom Pvt. Ltd. The jurisdictional Addl. Commissioner vide order -in -original dated 8 -4 -2010 confirmed the abovementioned Cenvat credit demand against M/s. Asha Telecom Pvt. Ltd. along with interest and penalty of equal amount was imposed on them under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Besides this another penalty of Rs. 2 Lakh was imposed on Shri Ashok Verma for taking Cenvat credit on the basis of bogus invoices under Rule 26 of the Central Excise Rules. On being appeal filed by Shri Ashok Verma, Director before the Commissioner, the imposition of penalty on Shri Ashok Verma, Director under Rule 26(1) was upheld vide order -in -appeal dated 8 -10 -2010 against which this appeal has been filed. Heard both the sides.

(2.) SHRI N.K. Sharma, ld. Counsel for the appellant, pleaded that the confirmation of Cenvat credit demand against M/s. Asha Telecom Pvt. Ltd. and imposition of penalty on them under Rule 15(2) is not being disputed, that in this appeal, only the imposition of penalty on Shri Ashok Verma under Rule 26 which is being disputed, that under Rule 26 of the Central Excise Rules, penalty can be imposed only on the person who has acquired possession or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner dealing with, any excisable goods which he knows or has reason to believe are liable to confiscation, that in this rule, there is no provision for imposing penalty for taking wrong Cenvat credit and that in view of this, the impugned order upholding the imposition of penalty on the appellant under Rule 26 is not sustainable.