2010 (11) TMI 172 - AT - Central Excise

Demand - 100% EOU - Movement of goods from one partnership EOU to another EOU - Persons liable to pay penalty - As no re-warehousing certificate was received by the said appellant within the prescribed period and investigations conducted by the Revenue revealed that the goods cleared by the said respondent, stand diverted to the market, it has to be held that the contravention was committed by the partnership firm - penalty to be imposed on partnership firms.

Summary

Issues:
1. Penalty imposition on partnership firm and partners.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Ahmedabad arose from the Commissioner (Appeals)'s decision to set aside the penalty on the partnership firm while upholding penalties on the partners. The Assistant Commissioner had confirmed the duty demand against the respondent firm along with penalties imposed on them and the partners under Central Excise Rules and Customs Act. The Commissioner (Appeals) upheld the duty confirmation, which was not under appeal. The Revenue challenged the setting aside of the penalty on the partnership firm by the Commissioner (Appeals).

The main contention in the Revenue's appeal was that the penalties should not have been set aside for the partnership firm and partners. The Tribunal agreed with the Revenue's argument, stating that the contravention was committed by the partnership firm, a 100% Export Oriented Unit (EOU), which cleared goods without payment of duty. As the firm was the manufacturing unit and responsible for the contravention, the penalty imposition on the partnership firm was upheld by modifying the Commissioner (Appeals)'s order.

Regarding the penalty imposition, the original adjudicating authority had not provided the option to pay 25% of the penalty amount within 30 days for a reduced penalty, as per precedents. The Tribunal extended this option to the partnership firm. The Tribunal did not interfere with the penalties imposed on the partners as there were no separate appeals by them. The Revenue's appeal was disposed of accordingly by the Tribunal.

In conclusion, the Appellate Tribunal upheld the penalty imposition on the partnership firm, extended the option for reduced penalty payment, and maintained the penalties on the partners as per the Commissioner (Appeals)'s order.