2011 (3) TMI 1079 - AT - Central Excise

Penalty under Rule 26 of Central Excise Rules, 2001 - Sale of 8 MTs of scrap without payment of duty - Held that - The appellant appearing in person has submitted that he joined factory on 1.3.01 and was relatively new - He was handling the Purchase department and as the person required to effect the clearance was absent, his signatures were taken on the invoice for clearance of 8 MTs of goods - When he realized his mistake, he added said 8 MTs in next invoice and paid the duty - thus set aside imposition of penalty of Rs.50,000/- imposed upon the appellant - Decided in favour of assessee.

Summary

Issues:
Imposition of penalty under Rule 26 of Central Excise Rules, 2001 on the appellant for alleged clandestine removal of goods without payment of duty.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad, dealt with the challenge to a penalty of Rs.50,000 imposed on the appellant under Rule 26 of Central Excise Rules, 2001. The Commissioner had confirmed the duty demand against M/s National Technology (I) Inc. for clandestine removal, leading to the imposition of the penalty on the present appellant, who was a Senior Manager in the company engaged in manufacturing Printed Circuit Boards. The appellant's involvement in the clearance of goods without payment of duty was the central issue in the appeal. The Commissioner's order highlighted the appellant's actions regarding the clearance of scrap without invoices and duty payment, followed by an attempt to regularize the situation by including the cleared goods in a subsequent invoice.

The Commissioner noted that the appellant, being in a senior position, should have been aware of the duty payment requirements for goods removal. However, considering that the duty was paid before the show cause notice, a lenient view was taken, resulting in the imposition of a penalty. The appellant argued that he was relatively new in the company and had signed the invoice for goods clearance in the absence of the responsible person. Upon realizing the error, the appellant rectified the situation by paying the duty for the previously uncleared goods. The Tribunal acknowledged the facts accepted in the Commissioner's order and concluded that a penalty should not have been imposed, overturning the decision and granting relief to the appellant.

In summary, the judgment revolved around the imposition of a penalty on the appellant for involvement in the clearance of goods without duty payment, despite subsequent regularization of the situation. The Tribunal found the appellant's actions justifying a lenient view, leading to the setting aside of the penalty and allowing the appeal with consequential relief.