2014 (3) TMI 827 - AT - Central Excise

Penalty under Section 209A of the Central Excise Rules - Appellant dealing with the accounts relating to the glass tubings being manufactured by an unregistered unit rendering the same liable for confiscation - Held that - there is no specific finding by the adjudicating authority against the appellant. Mere undertaking the work relating to purchase of raw materials and other requirements of the company cannot be held to be an offence covered under the provisions of Rule 209A unless there is a specific finding, based upon the evidence and the role played by the appellant. We find no reasons to uphold the said imposed penalty upon the appellant. The same is accordingly set aside - Decided in favour of assessee.

Summary

Issues: Imposition of penalty under Section 209A of the Central Excise Rules.

In this case, the appellant challenged the penalty of Rs. 100 lakhs imposed on them under Section 209A of the Central Excise Rules. The Commissioner (Appeals) based the penalty on the involvement of the appellant, a chartered accountant, in the internal financial matters and purchase of raw materials for a company manufacturing glass tubings. The appellant argued that they were associated with the company for a limited period and cannot be held responsible for any wrongdoing. The Tribunal noted that there was no specific finding against the appellant by the adjudicating authority. Merely handling purchase activities does not constitute an offense under Rule 209A without clear evidence of involvement. Consequently, the Tribunal set aside the penalty imposed on the appellant, as there was no basis to uphold it. The appeal was allowed, providing the appellant with consequential relief.

This judgment highlights the importance of establishing a direct link between the actions of an individual and the offense under consideration. It emphasizes the need for specific findings based on evidence and the role played by the individual in imposing penalties under the Central Excise Rules. The case serves as a reminder that penalties should be supported by concrete evidence of wrongdoing, especially when attributing liability to individuals based on their roles within a company.