2011 (6) TMI 111 - AT - Central Excise

Penalty - Rule 26 of Central Excise Rules, 2002 - clandestine removal - The appellant herein was a broker associated with the M/s. Quartz Metal Industries - During the course of search of his residential premises incriminating documents were recovered and on the basis of which proceedings were initiated against M/s. Quartz Metal Industries and the statement of present appellant, who acted as broker for the manufacturing unit, stands recorded by the officers - The lower authorities have held that the present appellant was actively aiding and abetting the fraudulent activities of M/s. Quartz Metal Industries - Revenue submits that the appellant s liability to penal action does not stand disputed by them - The quantum of penalty is not dependent upon the commission earned by the said appellant - Reduce the penalty imposed upon the appelalnt to Rs. 35,000/-, which already stands deposited by the appellant - The appeal is otherwise rejected.

Summary

Issues: Imposition of penalty under Rule 26 of Central Excise Rules, 2002 for aiding in clandestine removal.

In this case, the Appellate Tribunal CESTAT, Ahmedabad, heard an appeal against the imposition of a penalty of Rs. 1.5 Lakhs on the appellant under Rule 26 of the Central Excise Rules, 2002. The penalty was imposed by the original adjudicating authority in a case involving M/s. Quartz Metal Industries for clandestine removal. The appellant, a broker associated with M/s. Quartz Metal Industries, had incriminating documents found in his residential premises. The authorities found that the appellant was actively aiding and abetting the fraudulent activities of M/s. Quartz Metal Industries. The appellant did not dispute these facts but argued that his total commission earnings from the sales were only Rs. 20,000. He requested a reduction in the penalty, stating that he had already paid Rs. 35,000 towards the penalty in compliance with a Tribunal stay order. The Departmental Representative argued that the appellant's liability for penalty was not in dispute, and the amount of penalty was not dependent on the commission earned by the appellant. The duty evaded by M/s. Quartz Metal Industries amounted to Rs. 6.28 Lakhs. The Tribunal, considering the circumstances, reduced the penalty to Rs. 35,000, the amount already paid by the appellant. However, apart from this reduction, the appeal was rejected. The judgment was pronounced by Mrs. Archana Wadhwa at the Appellate Tribunal CESTAT, Ahmedabad.