2018 (9) TMI 1350 - AT - Central Excise

Penalty u/r 26 of CER on Director - Revenue stand is that being a Director it cannot be presumed that he was not aware of the illegal activities of manufacturing unit - Held that - In the absence of any evidence to show the involvement of the Director, penalty cannot be imposed upon him on the sole ground of him being the Director - also, penalty has been imposed under Rule 26 of the Central Excise Rules without there being any proposal in the show cause notice for confiscation of the goods or any order of the confiscation by the Adjudicating Authority - penalty u/r 26 is not justified - appeal allowed - decided in favor of appellant.

Summary

The penalty of Rs. 40,000 imposed on the appellant under Rule 26 of the Central Excise Rules was set aside by the Appellate Tribunal CESTAT ALLAHABAD due to lack of evidence showing the Director's involvement in illegal activities. No proposal for confiscation of goods was made in the show cause notice, so the penalty was not justified. The appeal was allowed with consequential relief to the appellant.