2003 (11) TMI 399 - AT - Central Excise

Summary

Issues Involved:
1. Imposition of penalty on M/s. S.S. Laminates Private Limited and its Directors.
2. Confiscation of assets used in connection with the manufacture of laminated fabrics.
3. Imposition of penalty under Rule 209A on the Director, Shri M. Srinivasa Rao.

Analysis:

Issue 1: Imposition of penalty on M/s. S.S. Laminates Private Limited and its Directors

The Central Excise officers found that M/s. S.S. Laminates were evading duties by clearing laminated fabrics as unlaminated ones. The Commissioner confirmed a duty amount and imposed penalties on both the company and its Director. M/s. S.S. Laminates argued that they believed there would be no duty liability on laminated fabrics due to certain notifications. They cited previous cases to support their claim that penalties should not be imposed when there is a genuine belief of non-liability. However, the Tribunal found that M/s. S.S. Laminates did not clear the laminated fabrics in a bona fide manner, deliberately evading duty payments. Thus, the penalties imposed under various rules were deemed justified.

Issue 2: Confiscation of assets used in connection with the manufacture of laminated fabrics

The Commissioner ordered the confiscation of assets used in connection with the manufacturing process of laminated fabrics, allowing redemption upon payment of a fine. The Tribunal upheld this decision, citing Rule 173Q(2) of the Central Excise Rules, which allows confiscation when duty exceeds a certain amount. As the duty in this case exceeded the threshold, the confiscation and imposition of the redemption fine were deemed lawful and appropriate.

Issue 3: Imposition of penalty under Rule 209A on the Director, Shri M. Srinivasa Rao

Shri M. Srinivasa Rao, the Director and Power of Attorney holder, was penalized under Rule 209A by the Commissioner. However, the Tribunal found that there were no specific allegations in the Show Cause Notice or in the Commissioner's findings regarding how Shri M. Srinivasa Rao contravened Rule 209A. As a result, the Tribunal concluded that there was no justification for imposing a penalty on Shri M. Srinivasa Rao. The appeal of M/s. S.S. Laminates Private Limited was rejected, while the appeal of Shri M. Srinivasa Rao was allowed.

This detailed analysis of the judgment highlights the issues of penalty imposition, asset confiscation, and individual liability under specific rules, providing a comprehensive overview of the legal proceedings and outcomes.