2013 (11) TMI 492 - AT - Central Excise

Waiver of Pre-deposit - Personal Penalty under Rule 26 of CE Rules 2002 r.w. Erstwhile Rule 209A of CE Rules 1944 receipt of fabrics on which duty liability was not discharged by an EOU - Held that - The issue needs to be gone into detail whether as to penalty is liable to be imposed on them - It can be done, only after going through the statements recorded by the authorities - the statements of these individuals are not annexed to the appeal memoranda - Since the issue requires more appreciation of facts thus the applicant are directed to deposit an amount of Rupees Five Thousand as Pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues: Penalty imposition under Central Excise Rules, 2002 and 1944 on individuals/shop owners.

In the judgment by the Appellate Tribunal CESTAT AHMEDABAD, the issue at hand was the penalty imposed on three applicants under Rule 26 of the Central Excise Rules, 2002 read with erstwhile Rule 209A of the Central Excise Rules, 1944. The Tribunal noted that the applicants had admitted to receiving fabrics on which duty liability was not discharged by an EOU. However, it was observed that the adjudicating authority had not provided clear findings on how the penalty should be imposed on these individuals/shop owners. The Tribunal emphasized the need for a detailed examination to determine the liability of each individual and the basis for imposing the penalty. The statements recorded by the authorities were deemed crucial for this assessment, but as they were not annexed to the appeal memoranda, the Tribunal was unable to delve into the issue thoroughly at that point. Consequently, the Tribunal directed all the appellants to deposit Rs.5,000 each within four weeks for further proceedings. The compliance report was to be submitted to the Deputy Registrar, who would then present the files to the Bench for a decision on 21.08.13. Pending compliance, applications for waiver of pre-deposit of the remaining penalty amounts were allowed, and the recovery was stayed until the appeals were disposed of.

This judgment highlights the importance of a detailed examination of facts and statements in cases involving penalty imposition under the Central Excise Rules. It underscores the necessity for clear findings by the adjudicating authority to justify penalties on individuals/shop owners. The Tribunal's decision to direct the appellants to deposit a nominal amount for further proceedings indicates the seriousness of the issue and the need for a thorough review before making a final determination on penalty liability. The stay on recovery pending appeal disposal demonstrates a balance between ensuring compliance and allowing due process for the appellants. The judgment reflects a procedural approach to handling penalty matters, emphasizing the significance of evidence and proper assessment before imposing financial liabilities on parties involved.