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2007 (9) TMI 444 - AT - Central Excise
Issues involved: Imposition of personal penalties under Rule 209A of Central Excise Rules on individuals for alleged involvement in clandestine removal of man-made processed fabrics without receiving Central Excise invoices.
Summary: 1. The judgment by the Appellate Tribunal CESTAT, Mumbai pertained to the imposition of personal penalties on two individuals under Rule 209A of Central Excise Rules. The penalties were imposed by the Commissioner of Central Excise on the grounds of alleged involvement in clandestine removal of man-made processed fabrics without receiving Central Excise invoices. 2. The main entity involved in the case was M/s. Anu Textiles Mills Pvt Ltd., against whom duties were confirmed for clandestine removal of fabrics. The first appellant, Shri Jaiprakash R. Jalan, was penalized as the purchaser of the fabrics from M/s. Anu Textiles Mills Pvt. Ltd. without receiving Central Excise invoices. 3. The appellants contended that they procured goods under commercial invoices from the processor and made payments through accounts payee cheques. It was argued that there was no legal obligation to receive goods under Central Excise invoices, especially since Shri Jalan was not a Central Excise assessee. 4. The second appellant, Shri S.V. Sethia, was involved in bill discounting for the processor. The penalty imposed on him was based on not receiving Central Excise invoices to verify the duty paid character of the fabrics. However, it was clarified that bill discounting did not involve knowledge of the duty paid status of the goods. 5. The Tribunal found that there was no evidence to suggest that the appellants were aware of the non-duty paid character of the fabrics or benefitted from the clandestine activities of the processor. As per Rule 209A, the criteria of dealing with excisable goods with knowledge of liability to confiscation was not met. Therefore, the penalties imposed on both appellants were set aside, and their appeals were allowed with consequential relief.
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