Order Date: 16 June 2022

Facts:

• The appellants, Steel & Metal Co. and others, have been charged for indulging in evasions of huge amount of Central Excise Duty by fraudulent availment of Cenvat Credit on the strength of Central Excise Invoices issued by M/s Shreeji Aluminium Pvt. Ltd. without physical receipts of the goods.
• They had procured fake lorry receipts without actual transportation of goods from one transporter i.e. M/s B.S. Patel Roadways. A show cause notice dated 30.12.2009 was issued, proposing demand of Cenvat Credit along with penalty from M/s G.K. Founders Pvt. Ltd. and penalty under Rule 26 of Central Excise Rules 2002 on all the Appellant. 
• In addition, the authority also imposed penalty on all the Appellant under Rule 26 of Central Excise Rules, 2002. Aggrieved, appellants filed an appeal against the order. 

Issue:

• Whether the appellants are liable for penalty under Rule 26 of Central Excise Rules 2002 or not?

Order:

• The Tribunal observed that Rule 26 of Central Excise Rules 2002 indicates that a person who is involved either directly or indirectly, by way of possession, or transporting, removing, depositing etc. or in any other manner dealing with excisable goods and who has the knowledge that consequence of such said acts or omissions on his part could result in the impugned goods becoming liable for confiscation under the Act/Rules is then exposed to imposition of penalty under this rule.
• The Tribunal held that Appellants are liable to penalty under Rule 26 of the Central Excise Rules. As they have full knowledge about every stage of removing, keeping, selling, concealing the excisable goods and the same would not have been possible without their active participation and connivance with each other.
• However, in respect to imposing penalty on M/s. B.S Roadways as well as a separate penalty on Proprietor Shri Saleem Saheb Patel, the tribunal hold that the proprietary concern is not a different legal entity from the proprietor. Therefore, separate penalty was set aside on Shri Saleem Saheb Patel proprietor of M/s B.S. Roadways.
• Accordingly, the appeals filed were dismissed.