2005 (4) TMI 380 - AT - Central Excise

Summary

Issues: Stay application for recovery of penalty under Section 209A of Central Excise Act based on lack of awareness and liability of confiscation of goods.

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi involved a stay application for the recovery of a penalty imposed under Section 209A of the Central Excise Act. The applicant, Shri Rajeev Mardia, sought a stay on the penalty of Rs. 1 Lakh, arguing that he had no knowledge or reason to believe that the goods were liable to confiscation. The respondent, represented by Shri S.M. Tata, contended that as the Managing Director of M/s. Mardia Steel Ltd., Shri Rajeev Mardia was aware of the under-valuation of goods and the subsequent duty evasion. It was argued that he could not claim ignorance regarding the pricing pattern and the sale of goods at higher prices without appropriate duty payment, leading to the imposition of the penalty.

Upon examination of the record, the Tribunal found that the adjudicating authority had concluded that Shri Rajeev Mardia, in his capacity as the Managing Director, could not deny knowledge of the under-valuation and consequent duty evasion. The Tribunal upheld the penalty imposed under Section 209A of the Central Excise Act, amounting to Rs. 1 Lakh, considering the duty demand of Rs. 72,61,528. It was noted that Shri Rajeev Mardia failed to provide any acceptable reason for the stay of the penalty. Consequently, the Tribunal ruled that there was no justification to stay the penalty and directed Shri Rajeev Mardia to pre-deposit the entire penalty amount within four weeks and report compliance by a specified date.

In conclusion, the judgment emphasized the importance of accountability and knowledge in cases involving duty evasion and under-valuation of goods. It highlighted that individuals holding key positions in companies cannot evade responsibility by claiming ignorance, especially when evidence suggests their awareness of the unlawful practices. The decision underscored the need for strict adherence to excise regulations and the imposition of penalties to deter non-compliance with the law.