2008 (11) TMI 605 - HC - Central Excise

Whether in view of the admissions contained in the statement of the Respondent recorded under Section 14 of the Act, which is admissible in evidence, the Tribunal has committed substantial error of law in setting aside the personal penalty imposed under Rule 209-A of the Central Excise Rules, 1944 though the Respondent had knowingly concerned himself in fraudulent acts in contravention of provisions of the rules and dealt with goods which are held liable to confiscation under Rule 173Q of the Rules? Held that - In absence of any question of law, as proposed or otherwise, much less a substantial question of law, the appeal is dismissed.

Issues:
1. Reduction of redemption fine by the Tribunal.
2. Justification of setting aside penalty under Rule 173Q by the Tribunal.
3. Imposition of personal penalty under Rule 209A on the respondent.
4. Admissibility of the respondent's statement under Section 14 of the Central Excise Act.
5. Findings and orders of the Tribunal regarding penalties, confiscation, and fines.

Reduction of Redemption Fine:
The Tribunal reduced the redemption fine from Rs. 1,73,425 to Rs. 75,000. The demand of Rs. 4,63,095 under Rule 9(2) was deemed unsustainable as excise duty is payable only upon removal of manufactured goods from the factory premises. The Tribunal also set aside the confiscation of land, building, plant, and machinery, stating that the provisions of Rule 173Q(2)(a) apply to habitual offenders, which did not apply to the appellants in this case. The reduction of the redemption fine and deletion of penalty under Rule 173Q in the Company's case were challenged.

Setting Aside Penalty under Rule 173Q:
The penalty under Rule 173Q was set aside by the Tribunal based on an Apex Court decision. The Tribunal found that the appellants did not have the intention to evade duty and could not be classified as habitual offenders. The Tribunal's decision regarding the deletion of the penalty in the respondent's case was upheld, emphasizing the lack of evidence to invoke Rule 209A due to the officers' lack of knowledge about Central Excise law.

Personal Penalty under Rule 209A:
The Tribunal held that penalties under Rule 209A could not be imposed without evidence showing that the officers had knowledge of the goods' liability for confiscation. Since the officers were not aware of the provisions and had reversed entries upon being informed, the penalties were deemed unwarranted and set aside.

Admissibility of Respondent's Statement:
The respondent's statement recorded under Section 14 of the Central Excise Act was crucial in the case. The statement contained admissions regarding fraudulent acts and contravention of rules, leading to the imposition of penalties and confiscation of goods.

Findings and Orders of the Tribunal:
The Tribunal's findings emphasized the importance of evidence and knowledge in imposing penalties under various rules. The Tribunal considered the specific circumstances of the case, including inadvertent errors and procedural infractions, to determine the appropriateness of penalties, fines, and confiscation orders. The Tribunal's decisions were based on a thorough evaluation of the evidence and legal requirements, leading to the dismissal of the appeal due to the absence of substantial questions of law.

In conclusion, the judgment addressed various issues related to penalties, fines, and confiscation orders under the Central Excise Rules, highlighting the significance of evidence, knowledge, and procedural compliance in determining liability and sanctions in excise matters.

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