2016 (11) TMI 1570 - AT - Central Excise

Penalty u/r 209-A of CER read with Rules 26 of CER - Held that - The penalty under Rule 209-A of Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2001/2002 can be imposed on a person who deals with the excisable goods liable for confiscation - in the impugned SCN that there was no proposal for confiscation of any goods. Therefore, it is clear that there were no goods, which were liable for confiscation. It is also clear that when the goods were not liable for confiscation, the appellant has not dealt with any goods which were liable for confiscation. The appellant was not liable for imposition of penalty under Rule 209A of Central Excise Rules, 1944 nor he was liable for imposition of penalty under Rule 26 of Central Excise Rules, 2001/2002 - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Imposition of penalty on the appellant under Rule 209-A of Central Excise Rules, 1944 and Rule 26 of Central Excise Rules, 2001/2002.

Analysis:
The appellant, an employee of a company, was issued a show-cause notice proposing the demand of Central Excise duty and imposition of penalties on both the company and the appellant. The Original Authority imposed a penalty of ?1 lakh on the appellant under Rule 209-A of Central Excise Rules, 1944 read with Rule 26 of Central Excise Rules, 2001/2002. The appellant appealed to the Tribunal against this order.

During the proceedings, the Tribunal considered the contentions of both parties. It was noted that the penalty under Rule 209-A and Rule 26 can be imposed on a person dealing with excisable goods liable for confiscation. However, the show-cause notice did not propose confiscation of any goods, indicating that there were no goods liable for confiscation. Therefore, as the appellant had not dealt with any goods subject to confiscation, the Tribunal concluded that the penalty under these rules was not applicable in this case.

Consequently, the Tribunal modified the Order-in-Original to set aside the penalty imposed on the appellant. The appeal was allowed in favor of the appellant, highlighting that the appellant was not liable for the penalties under Rule 209-A and Rule 26 of the Central Excise Rules. The judgment emphasized the necessity for the existence of goods liable for confiscation to impose such penalties, which was absent in this scenario.