2007 (6) TMI 474 - AT - Central Excise

Summary

Issues:
Challenge to penalty imposed on the appellant, liability of proprietor for penalty, duty confirmation against trading unit, penalty under Rule 209A.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Ahmedabad involved the challenge to a penalty of Rs. 1,25,000 imposed on the appellant, who is the proprietor of a trading unit named M/s. Karan Textile. The trading unit procured goods from the open market, processed them, and dispatched them to customers. However, the goods were seized by officers while lying in the transporter's godown. Initially, the original adjudicating authority confirmed the duty demand against M/s. Karan Textiles and imposed penalties on both the trading unit and the proprietor. Upon appeal, the appellate authority noted that since M/s. Karan Textiles was only a trading company and not a processor, no duty could be confirmed against it. Consequently, the appeal of M/s. Karan Textiles was allowed, but the penalty on the proprietor was upheld under Rule 209A.

The advocate representing the appellant argued that upholding the penalty on the proprietor was unjustified and unwarranted. It was contended that there was no evidence to indicate that the manufacturer of the goods had not paid the duty and that the appellant was aware of any such non-payment. After hearing the arguments and considering the case's facts and circumstances, the judge, Ms. Archana Wadhwa, opined that the appellate authority should have set aside the penalty on the proprietor on the same grounds as the penalty on the trading unit was set aside. Consequently, the judge set aside the impugned order and allowed the appeal, providing consequential relief to the appellant.

In conclusion, the judgment by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT, Ahmedabad, addressed the issues of penalty imposition on the appellant, the liability of the proprietor for the penalty, confirmation of duty against the trading unit, and the application of penalty under Rule 209A. The decision emphasized the need for consistency in penalty imposition and the requirement for evidence to justify such penalties, ultimately resulting in the appeal being allowed and relief granted to the appellant.