2017 (3) TMI 916 - AT - Central Excise

Clandestine removal - penalty u/s 209A of CER, 1944 - the appellant urges that there is no finding of his involvement in any clandestine activity - Held that - disproportionate penalty may be maintained as he was the Managing Director and C.E.O. of the company and as such he was definitely aware with the misdeeds going on in the company - Penalty on Mr. R.K. Somani is reduced to ₹ 25,000/- u/r 209A of CER, 1944 - appeal disposed off - decided partly in favor of appellant.

Summary

Issues involved:
1. Imposition of penalty under Section 209A of Central Excise Rules, 1944 on the Director of Somani Iron & Steels Ltd.
2. Allegations of clandestine removal of goods and suppression of production.
3. Reduction of penalty and demand by the Tribunal.
4. Refund of pre-deposit amount to the appellant.

Analysis:
1. The judgment pertains to the imposition of a penalty under Section 209A of the Central Excise Rules, 1944 on the Director of Somani Iron & Steels Ltd. The Order-in-Original dated 28.01.1998 imposed a penalty of ?50,00,000 on the Director for his alleged involvement in the clandestine removal of goods and being a beneficiary of the same. The Tribunal reviewed the evidence and arguments presented by both parties to determine the Director's culpability in the matter.

2. The case involved allegations of clandestine activities, including the suppression of production and duty evasion. The appellant's counsel argued that there was no concrete finding implicating the Director in any clandestine activity. The Tribunal examined the records and findings related to the production discrepancies and the alleged involvement of the Director in the misdeeds. It was noted that the private records recovered from the premises indicated discrepancies in production figures, leading to the imposition of penalties on various individuals and entities associated with the company.

3. The Tribunal, after a detailed analysis of the evidence and contentions presented, found that the demand and penalties imposed were unsustainable on several counts. The Tribunal reduced the demand from ?4,39,98,310 to ?6,63,320 and set aside the remaining balance. The penalty on Somani Iron & Steels Ltd. was reduced to ?50,000, and penalties on other appellants were set aside. The Tribunal considered the findings in previous orders and adjusted the penalties accordingly, ultimately allowing the appeal in part and directing the refund of the pre-deposit amount made by the appellant.

4. In conclusion, the Tribunal partially allowed the appeal, reducing the penalty imposed on the Director and directing the refund of the pre-deposit amount. The Tribunal emphasized the importance of considering previous findings and evidence in determining the appropriate penalties and demands in cases of alleged excise rule violations. The judgment highlighted the need for a thorough review of evidence and legal provisions to ensure fair and just outcomes in excise law matters.