2005 (12) TMI 508 - AT - Central Excise

Summary

Issues:
Imposition of penalty under Rule 209A of CE Rules, 1944 on the appellant for alleged involvement in dealing with clandestinely removed goods of another company.

Analysis:
The appellant, a proprietor of a company, was penalized Rs. 10 lakhs under Rule 209A of CE Rules, 1944 based on the allegation that she was involved in dealing with clandestinely removed goods of another company. The investigation was initiated on the suspicion that another company had manufactured and cleared "SINDHURA" Brand Herbal face cream clandestinely. During the investigation at the appellant's premises, empty printed plastic containers were found, and the appellant denied any involvement with these containers or the purchased product. The Commissioner imposed the penalty based on the appellant's alleged admission during the investigation. However, the appellate tribunal found discrepancies in the Commissioner's findings.

The tribunal noted that the appellant's possession of empty containers did not conclusively prove her involvement in dealing with the clandestinely removed goods. The appellant's denial of knowledge about the containers, except for them being brought by her son and kept in the room, indicated lack of direct involvement. The tribunal emphasized the lack of evidence linking the appellant to the clandestinely cleared goods, which were not found on her premises. The penalty of Rs. 10 lakhs was deemed unjustified as it was based on negligible value containers, not the actual goods in question.

In conclusion, the tribunal set aside the penalty imposed on the appellant, as there was insufficient evidence to prove her involvement in dealing with the clandestinely removed goods. The tribunal emphasized the importance of substantial evidence and direct connection to the alleged offense before imposing penalties under Rule 209A of CE Rules, 1944.