2011 (6) TMI 408 - AT - Central Excise

Penalty under Rule 209 A of Central Excise Rules 1944 and Rule 26 of Central Excise Rules 2001 - appeal dismissed for non-compliance of conditions of stay order passed in terms of 35F of Central Excise Act - Held that - Job of mixing the raw materials a trade secret of pan masala and gutka was done by the appellant knowingly involved in activities of suppression of production and clandestine removal cannot be held unreasonable - takeibng note of statements of appellant and the statements of Shri Mukesh K Gautam Dinesh Kumar and Shri Rajender Singh that the appellant was aware of removal of finished goods with bills and without bills- substantial reduction in penalties from from Rs.10 lakhs to Rs.5, 00, 000/- appeal of assessee partly allowed.

Summary

Issues:
Challenge against penalty imposed under Rule 209 A of Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2001 and CE Rules, 2002.

Analysis:
The appeal challenged a penalty of Rs. 10 lakhs imposed on the appellant under specific rules. The Commissioner confirmed the demand of duty on a firm and four individuals, including the present appellant, for suppression of production and clandestine removal of goods. The appellant's role as an authorized signatory and accountant was highlighted. The main party's appeal was dismissed for non-compliance with pre-deposit orders. The appellant's defense included being a paid employee and not directly involved in the illicit activities. The appellant sought leniency or reduction of the penalty.

The Commissioner's order demanded duty from the firm and imposed penalties on the appellant and others. The Tribunal noted that the charges against the firm were confirmed, and the appeals against the order were dismissed. The roles of the other individuals involved were appreciated, leading to a reduction in their penalties. The Commissioner detailed the appellant's involvement in clandestine activities, including handling and procurement of raw materials, and knowledge of removal of finished goods. The appellant's significant role beyond accounting duties was emphasized, along with being an authorized signatory. The Commissioner's findings were based on statements and evidence, leading to the conclusion that the appellant was knowingly involved in the suppression and removal activities.

The Tribunal acknowledged the circumstances but upheld the imposition of penalties. However, considering the reduction in penalties for other individuals, some leniency was shown. The appeal was partly allowed, reducing the penalty from Rs. 10 lakhs to Rs. 5,00,000.