2008 (5) TMI 530 - AT - Central Excise

Clandestine removal - Penalty on transporter of goods - Held that - there is no evidence to show involvement of the transporters to aid or abet the clandestine activity of the manufacturer they cannot be held guilty of any violation. Mere providing vehicles and transporting goods will not attract any penal action against them - penalty set aside - appeal allowed.

Summary

Issues:
Penalties imposed under Rule 209A of Central Excise Rules, 1944 on transporters for transporting excisable goods without Central Excise invoices.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad involved the imposition of penalties on transporters for transporting excisable goods without Central Excise invoices. The impugned order passed by the CCE, Daman, imposed penalties on the appellants based on the findings that they transported goods without the cover of Central Excise invoices. However, it was noted that the charges against the manufacturer were related to the use of parallel (fake) invoices, indicating that the transporter received invoices showing coverage of the goods. The Tribunal emphasized that transporters cannot be expected to be experts in Central Excise laws and determine the duty liability of the goods being transported. Transporters are primarily engaged in transportation and are not required to verify the excisability of goods unless there is evidence of intentional connivance with clandestine activities. Without proof of transporter involvement in aiding or abetting illegal activities, penalties under Rule 209A cannot be imposed.

The Tribunal highlighted that in the absence of evidence showing transporter involvement in facilitating clandestine activities, penalties cannot be justified merely based on providing vehicles and transporting goods. The judgment emphasized that transporters should not be penalized solely for their role in transportation without any indication of intentional connivance or knowledge of the illegal activities of the manufacturer. Therefore, the penalties imposed on the appellants were set aside, and their appeals were allowed with consequential relief. The decision underscores the importance of establishing transporter complicity in illegal activities before imposing penalties under Rule 209A of the Central Excise Rules, 1944.

In conclusion, the judgment by the Appellate Tribunal CESTAT, Ahmedabad provides clarity on the liability of transporters in cases involving the transportation of excisable goods without Central Excise invoices. It emphasizes the need for concrete evidence of transporter involvement in illegal activities before imposing penalties and highlights that transporters should not be penalized solely for their role in transportation without proof of intentional connivance. The decision ensures a fair and balanced approach in holding transporters accountable for violations related to excisable goods, safeguarding them from unjust penalties in the absence of conclusive evidence of wrongdoing.