2017 (6) TMI 421 - AT - Central Excise

Penalty u/r 26 of CER, 2002 - clandestine removal - Held that - the appellant, M/s Kailash Traders willingly connived and colluded with the manufacturer M/s GIPPL in dealing with clandestinely removed goods namely sponge iron/MS ingots etc which the appellant knew were liable for confiscation under the CEA, 1944 and the rules made thereunder. There is no enough defence has been given by the appellant in this regard - penalty sustained - appeal dismissed - decided against appellant.

Summary

Issues:
- Appeal against penalty imposed under Rule 26 of Central Excise Rules, 2002
- Allegations of clandestine removal of goods
- Collusion and connivance with manufacturer
- Defence provided by the appellant
- Impugned order sustaining penalty

Analysis:
The case involves an appeal by M/s Kailash Traders against a penalty of ?10,000 imposed on them under Rule 26 of the Central Excise Rules, 2002. The penalty was initially imposed by an Assistant Commissioner and upheld in an Order-in-Appeal dated 15.3.2015. The central issue revolves around allegations of clandestine removal of sponge iron by M/s Kailash Traders, which were discovered during searches conducted by Central Excise officers. A Show Cause Notice was issued, and the subsequent adjudication resulted in the imposition of the penalty.

The appellant, represented by Advocate Shri Kumar Vikram, argued that similar group matters had been remanded by the Tribunal for de novo adjudication due to inconsistencies and violations of natural justice. However, the main noticee, M/s GIPPL, did not approach the Tribunal in this case. As a commission agent dealing with iron and steel products, M/s Kailash Traders was implicated in colluding with M/s GIPPL in the clandestine removal of excisable goods. The appellant failed to provide a sufficient defence against these allegations.

Given the lack of a compelling defence from the appellant, the impugned order sustaining the penalty of ?10,000 was upheld. The Tribunal found that M/s Kailash Traders willingly participated in the illegal activities and thus dismissed the appeal as lacking in merits. The judgment was pronounced on 23.5.2017 by Member (Technical) Mr. Ashok K. Arya.