2020 (10) TMI 375 - AT - Central Excise

Imposition of penalty of ₹ 1,00,000 under rule 209A of erstwhile Central Excise Act, 1944 - physical handling of the goods that were allegedly removed without payment of duty - HELD THAT - On a perusal of the decision of the Hon ble High Court of Bombay in COMMISSIONER OF CENTRAL EXCISE VERSUS M/S. BANSAL STEEL CORPORATION OTHERS, SHRI ASHOK KUMAR NAGESHWAR SINGH, PARTNER OF M/S. BANSAL STEEL CORPORATION 2017 (9) TMI 704 - BOMBAY HIGH COURT , while the facts leading to the dispute is, as narrated by Learned Authorised Representative, the principle laid down therein is that any of the enumerated activities in rule 209A of the erstwhile Central Excise Rules, 1944 must necessarily involve physical handling. In the circumstances of the lack of evidence of physical dealing by the appellant of the impugned goods, the penalty is set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Closure of appeal under Sabka Vishwas Scheme, 2019.
2. Imposition of penalty under rule 209A of Central Excise Act, 1944.

Analysis:
1. The first appeal by M/s Nucleus Technologies was closed under the Sabka Vishwas Scheme, 2019, and a discharge certificate was issued under section 127 of the Finance Act, 2019, resulting in the appeal being dismissed as deemed withdrawn.

2. The second appeal by Shri Ashish Kumar Govil challenged a penalty of ?1,00,000 under rule 209A of the Central Excise Act, 1944, upheld by the first appellate authority.

3. The appellant's counsel argued that the appellant had no involvement in the physical handling of goods allegedly removed without duty payment. The counsel contended that without evidence connecting the appellant to the goods, rule 209A should not apply, citing a Bombay High Court decision mandating physical connection for invoking rule 209A.

4. The Authorized Representative argued that the duty liability for seized goods was admitted under the Finance Act, 2019, and cited tribunal decisions to support the imposition of the penalty.

5. The Tribunal analyzed the Bombay High Court decision, emphasizing the requirement of physical handling for invoking rule 209A. The Tribunal found no evidence of physical dealing by the appellant with the goods, setting aside the penalty and allowing the appeal.

6. The judgment was pronounced on 11/09/2020, with the penalty being overturned due to the lack of evidence of physical involvement by the appellant with the impugned goods.