2009 (3) TMI 816 - AT - Central Excise

Summary

Issues:
1. Imposition of penalties on merchant-exporters for abetting an offence.
2. Liability of partnership firms for personal penalties under Rule 26 of Central Excise Rules, 2002.
3. Financial hardships plea.
4. Condonation of delay in appeal and waiver of pre-deposit for penalty.

Analysis:

Issue 1: Imposition of penalties on merchant-exporters for abetting an offence:
The judgment deals with penalties imposed on M/s. Vikram International and M/s. Sheetal Exports for abetting an offence committed by M/s. Evergreen Fashions. The appellants were found to have countersigned export documents facilitating fraudulent rebate claims by Evergreen Fashions. The Commissioner's order highlighted the lack of proof of goods removal and the awareness of the appellants regarding the implications of their actions. The judgment emphasized that the appellants could not feign ignorance of the transactions, leading to the conclusion of abetment of an admitted offence by Evergreen Fashions.

Issue 2: Liability of partnership firms for personal penalties under Rule 26:
The judgment addressed the argument regarding personal penalties on partnership firms like M/s. Vikram International under Rule 26 of the Central Excise Rules, 2002. The counsel cited a Tribunal decision stating that penalties under Rule 26 were imposable only on individuals, not firms. However, the court noted that the firm did not raise this argument in the relevant appeal memo, leading to the dismissal of the plea.

Issue 3: Financial hardships plea:
No plea of financial hardships was raised in the present application, indicating a lack of consideration for this aspect in the judgment.

Issue 4: Condonation of delay in appeal and waiver of pre-deposit for penalty:
The judgment addressed the delay in Mr. Pradeep Poddar's appeal, which was satisfactorily explained, leading to the allowance of the condonation of the delay. In Mr. Poddar's case, the court granted waiver of pre-deposit and stay of recovery for the penalty imposed under Rule 26, emphasizing the lack of recorded statement under Section 14 of the Central Excise Act as a basis for the decision.

Overall, the judgment focused on penalties imposed on merchant-exporters for abetting an offence, discussed the liability of partnership firms for personal penalties, and addressed specific applications for condonation of delay and waiver of pre-deposit for penalties, providing detailed reasoning for each decision.