VEE KAY ENTERPRISES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This order will dispose of CE As No. 7 and 105 of 2010 as it is stated by learned Counsel for the parties that questions of law involved in both the appeals are identical.

(2.) CEA No. 7 of 2010 has been preferred by the Assessee under Section 35G of the Central Excise Act, 1944 against order dated 4.9.2009 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short "the Tribunal") claiming following substantial questions of law:

(3.) The Assessee is a registered dealer under the provisions of Central Excise Act, 1944 ( for short "the Act"). It came to light during investigation that the Appellant was party to fraud in enabling credit to be taken for the duty paid without actual receipt of material which was a condition precedent for availing of CENVAT credit as per CENVAT Credit Rules, 2004. After considering the matter, order-in-original dated 7.1.2009 was passed raising demand of duty after disallowing the CENVAT credit and imposing penalty under Rule 25 of Central Excise Rules, 2002. The Adjudicating Authority levied penalty not only on the dealer wrongly availing CENVAT credit but also on the Appellant who by issuing fake invoices, facilitated the evasion of duty by wrongful availment of CENVAT credit. The said penalty was equal to the value of duty. The plea of the Appellant was that it did not take CENVAT credit itself and only issued invoices on the basis of which two manufacturers, namely, M/s Kay Iron Works (Jorian) Pvt. Ltd., village (Jorian), Yanuna Nagar and M/s United Chain Industries, earlier situated at E-17, Industrial Area, Yamuna Nagar and now at village (Jorian), Yamuna Nagar took the CENVAT credit. Further plea was that under Rule 26(2) a person issuing excise duty invoice without delivery of the goods was also liable to pay penalty to the extent of the amount of benefit taken, the said provision was added with effect from 1.3.2007 which was after the allegedly wrongful act of the Appellant. These contentions were not accepted and the Appellant was held liable to pay penalty equal to the amount of alleged evasion of duty. The Appellate Authority i.e. the Tribunal observed: