2012 (5) TMI 552 - AT - Central Excise

Waiver of pre-deposit of penalty - Clandestine removal of goods - Held that - Surprisingly, no duty confirmation proceedings stands initiated against the manufacturer of the goods on the allegation of clandestine removal of the same. The penalty stands imposed upon the present appellant on the findings that the Pan Masala in question was non-duty paid. I really fail to understand that if that be so, why Revenue shied away from initiating proceedings against the manufacturer for confirmation of demand of duty. In the absence of such an action on the part of the Revenue, to hold the appellant liable for penalty on the ground of transporting the non-duty paid goods, exceed all the basic principles of justice - admittedly the bags were delivered to the transporter in packed condition, who prepared the requisite documents for the transportation of the same relying upon the disclosure of the goods made by the consignor. The transporter cannot be expected to act like an excise officer to find out the duty paid or non-duty paid character of the goods before accepting booking of the goods and before transportation of the same. As such I find no justifiable reasons and on the contrary I find that the appellant has been put to unnecessary harassment and litigation by the department by taking inappropriate and unjust stand against the appellant - Decided in favour of assessee.

Summary

Issues:
1. Imposition of penalty under Rule 26 of Central Excise Rules on the transporter for carrying non-duty paid goods.
2. Discrepancy between penalty imposition on transporter and lack of action against the manufacturer for duty confirmation.
3. Transporter's responsibility in verifying duty payment status of goods before transportation.

Analysis:
Issue 1: The judgment addresses the imposition of a penalty of Rs. 1,66,860 on the transporter for carrying goods declared as Kachchi Tobacco but found to be Rajnigandha Pan Masala. The transporter was burdened with the penalty under Rule 26 of Central Excise Rules, despite not being directly involved in determining the duty status of the goods.

Issue 2: The court highlighted a significant discrepancy in the case where no duty confirmation proceedings were initiated against the manufacturer of the goods, despite the allegation of non-duty paid goods. This discrepancy raised questions about the fairness and consistency in the enforcement actions taken by the Revenue department against different parties involved in the transportation chain.

Issue 3: The judgment emphasizes the transporter's limited role and responsibility in verifying the duty payment status of goods before transportation. The transporter, in this case, accepted the consignment based on the disclosure made by the consignor and prepared necessary documents for transportation. The court noted that expecting the transporter to ascertain the duty status of goods like an excise officer would be unreasonable and unjust, leading to unnecessary harassment and financial burden on the transporter.

In conclusion, the court expressed dissatisfaction with the Revenue department's actions and set aside the penalty imposed on the transporter, citing lack of duty confirmation proceedings against the manufacturer and the transporter's limited role in determining the duty status of goods. The judgment highlights the importance of fairness, consistency, and clarity in enforcement actions to uphold justice and maintain public trust in the judicial system.