2014 (1) TMI 527 - AT - Central Excise

Waiver of Penalty under Rule 26 of the Central Excise Rules, 2002 Goods transported though having knowledge that they are liable for confiscation - Held that - Shri Rakesh Kumar Gupta could not have been held as having knowledge that the consignment, which has been brought to his godown for de-stuffing and segregating to various buyers, could be liable for confiscation, as the appropriate customs duty has been paid and there were duty paying documents - the provisions of Rule 26, which has been invoked against Shri Rakesh Kumar Gupta, prima facie, cannot stand to scrutiny of law - The second appellant Shri Tavinder Singh Dhodi, is a local transporter, who has transported the consignments from the godown of Shri Rakesh Kumar Gupta based upon the documents given by the CHA - the appellants has made out a prima facie case for the waiver of pre-deposit of the amount of penalty Waiver of Pre-deposits allowed till the disposal Stay granted.

Summary

Issues: Condonation of delay in filing appeals, Liability under Rule 26 of Central Excise Rules for transportation of consignments, Waiver of pre-deposit of penalties imposed.

Condonation of Delay:
The judgment addresses two applications for condonation of delay filed by the appellants due to filing the appeals almost on the last day. The delay being marginal, the tribunal condones it and directs the registry to accept the stay petitions and appeals for further consideration.

Liability under Rule 26 of Central Excise Rules:
The Revenue contends that two individuals are liable under Rule 26 for transportation of consignments with the knowledge that the goods are subject to confiscation. The first individual, Shri Rakesh Kumar Gupta, had engaged in a high sea sales agreement and facilitated the transportation of goods to his godown. However, it is noted that at the time of transportation, appropriate customs duty had been paid, and duty paying documents were in order. The tribunal concludes that Gupta could not have known about the potential confiscation of the goods at that stage, thereby questioning the invocation of Rule 26 against him. Consequently, the tribunal waives the pre-deposit of the penalty imposed on Gupta.

Second Appellant's Case:
Regarding the second appellant, Shri Tavinder Singh Dhodi, a local transporter who transported the consignments based on documents provided by the Customs House Agent (CHA), a similar analysis is conducted. The tribunal finds that Rule 26 cannot be applied to Dhodi as well, given the circumstances. Consequently, Dhodi is also granted a waiver of the pre-deposit of the penalties involved.

Waiver of Pre-Deposit of Penalties:
Ultimately, the tribunal determines that both appellants have established a strong prima facie case for the waiver of the penalties imposed. As a result, the applications for the waiver of pre-deposit of penalty amounts are allowed, and the recovery of said penalties is stayed pending the disposal of the appeals.