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2018 (11) TMI 1679 - AT - Central ExciseManufacture of Pan Masala and Gutkha - Pan Masala Packing Machines (Capacity Determination Collection of Duty) Rules 2008 - quantum of penalty - HELD THAT - The demand against the main assessee stands dropped by the lower authorities along with setting aside the penalty imposed upon them. As such there is no justification for imposition of penalty on the employee of manufacturing unit who was production incharge and authorized signatory - penalty set aside - appeal allowed.
Issues involved: Confirmation of duty demand against a manufacturing unit, imposition of penalties on the manufacturing unit and its authorized signatory, reduction of penalty on the authorized signatory by the Commissioner (Appeals), appeal against the penalty imposed on the authorized signatory.
Analysis: The judgment by the Appellate Tribunal CESTAT ALLAHABAD involved a case where a demand of duty amounting to around &8377; 37.50 lakhs was confirmed against a manufacturing unit, M/s Shyam Traders, engaged in the production of Pan Masala and Gutkha. The Additional Commissioner had also imposed penalties on M/s Shyam Traders and the authorized signatory. The Commissioner (Appeals) set aside the demand and penalties on M/s Shyam Traders but reduced the penalty on the authorized signatory to &8377; 50,000. This led to the present appeal challenging the penalty imposed on the authorized signatory. The Appellate Tribunal noted that the demand against the main assessee, M/s Shyam Traders, was dropped by the lower authorities along with the penalties imposed on them. Consequently, the Tribunal found no justification for imposing a penalty on the employee who was the production incharge and authorized signatory. Therefore, the Tribunal set aside the penalty imposed on the authorized signatory and allowed the appeal with consequential relief. In conclusion, the appeal was allowed by the Appellate Tribunal CESTAT ALLAHABAD, with the penalty imposed on the authorized signatory being set aside. This judgment highlights the importance of justifying penalties imposed on individuals associated with manufacturing units and the need for careful consideration of roles and responsibilities before imposing penalties.
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