2019 (8) TMI 1231 - AT - Central Excise

Imposition of penalty u/r 26 of CER, 2002 - dealing with the excisable goods without payment of duty - HELD THAT - The penalty under Rule 26 can be imposed only if the goods are held liable for confiscation - Admittedly, the goods were not held liable for confiscation. In these terms, the provision of Rule 26 of the Central Excise Rules, 2002 is not invokable to the facts of this case - the penalties imposed on the appellants are set-aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Penalty imposition under Rule 26 of the Central Excise Rules, 2002 on appellants for dealing with excisable goods without payment of duty.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chandigarh addressed the issue of penalty imposition under Rule 26 of the Central Excise Rules, 2002 on the appellants for their involvement in dealing with excisable goods without payment of duty. The case involved M/s PRS Rolling Mills Pvt. Ltd. clearing excisable goods on the appellants' invoices to avail the benefit of SSI exemption without duty payment. The invoices lacked the duty element, and payments received by the appellants were later remitted to M/s PRS Rolling Mills Pvt. Ltd. The Revenue contended that the appellants were engaged in dealing with excisable goods without duty payment, justifying the penalty under Rule 26. Both lower authorities had imposed penalties on the appellants under this rule.

Upon hearing the parties, the Tribunal referred to the provisions of Rule 26, emphasizing that penalties can only be imposed if the goods are liable for confiscation. However, in this case, it was noted that the goods were not held liable for confiscation. Consequently, the Tribunal concluded that the provision of Rule 26 was not applicable to the facts of the case. Therefore, the penalties imposed on the appellants were set aside. The Tribunal allowed the appeals with any consequential relief, if applicable, based on the observations made.

In summary, the judgment clarified that penalties under Rule 26 of the Central Excise Rules, 2002 can only be imposed when goods are liable for confiscation. Since the goods in question were not held liable for confiscation, the penalties imposed on the appellants were deemed unjustified and subsequently set aside by the Tribunal.