(1.) Appeal No. E/1150/2009; E/2269/2010
(2.) KARNATAKA Metal Company (KMC), the appellant in the first two appeals is aggrieved by penalties of Rs.50,827/ - and Rs.1,06,226/ - respectively imposed on them under Rule 25 of the Central Excise Rules, 2002. The finding against them is that they issued statutory invoices to another party without supply of goods with a view to enabling that party to avail CENVAT credit of the duty covered by the invoices. The challenge in the first appeal is to the effect that the CENVAT credit initially taken by the appellant's customer on the basis of the relevant invoices was subsequently reversed with interest and, further, 25% of the amount of CENVAT credit was also paid by the customer within 30 days from the date of receipt of the show -cause notice. The learned counsel for the appellant has reiterated this factual position and has urged that a lenient approach be taken. In the second appeal, the role played by the appellant is identical but the appellant does not know as to whether the customer reversed the CENVAT credit initially taken. I have heard the Deputy Commissioner (AR) also, who has reiterated the findings recorded by the original and first appellate authorities.
(3.) IN one case, the original authority imposed a penalty of Rs.50,827/ - and the appellate authority affirmed it. In the other case, the original authority imposed a penalty of Rs.1,06,226/ - and the appellate authority affirmed it. These penalties are equivalent to the amount of CENVAT credit which was irregularly passed on by the appellant to the customer without supply of goods. Rule 25 permits an amount equal to duty to be imposed as maximum penalty. In appropriate cases, it also enables the quasi -judicial authority to impose a lesser amount of penalty. During the period of offence, this minimum was Rs.10,000/ -. Considering the facts and circumstances of this case, I am inclined to reduce the quanta of penalties in the two cases to Rs.15,000/ - (Rupees Fifteen Thousand Only) and Rs.30,000/ - (Rupees Thirty Thousand Only) respectively. With this modification, the impugned orders are sustained.