2021 (3) TMI 782 - AT - Central Excise

Levy of penalty u/r 26 of Central Excise Rules, 2002 - Clandestine removal - Filter Cigarettes - penalty levied appellant has not obtained invoices before booking consignment - HELD THAT - From section 26 of CER, it is very much clear that any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty. From the facts of the case neither Revenue nor the statement of the appellant having knowledge of description of the goods and the goods in question are not duty paid. Further, the appellant is only booking agent who facilitates the persons coming to the Railway counter for booking and charging ₹ 100/- for booking and assistance. The appellant was nowhere had opportunity to know about the description of the goods or duty paying character of the goods. In the absence of such element of knowledge, provisions of Rule 26 of the Rules cannot be attracted in the facts and circumstances. Thus, without establishing knowledge of the appellant about the character of non payment of duty and description of the goods, penalty under Rule 26 of Central Excise Rules, 2002 is not imposable - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Imposition of penalty under Rule 26 of Central Excise Rules, 2002 for aiding and abetting the payment of Central Excise duty.
2. Liability of the booking agent for obtaining invoices before booking consignments.
3. Interpretation of Rule 26 in the context of possession and knowledge of excisable goods.

Analysis:
1. The case involved the imposition of a penalty under Rule 26 of Central Excise Rules, 2002 on the appellant for aiding in the evasion of central excise duty through clandestine removal of filter cigarettes. The appellant, a booking agent, was accused of facilitating the booking of consignments without obtaining proper invoices, leading to the evasion of duty. The seized goods were ordered for confiscation, and a penalty was imposed on the appellant, which was challenged in the appeal.

2. The appellant argued that as a booking agent, they were not required to obtain invoices as their role was limited to assisting in the booking process without detailed knowledge of the goods being transported. The appellant contended that since the proceedings against the manufacturers were dropped, no penalty should be imposed on them. However, the opposing party argued that the appellant's actions of accepting consignments without proper documentation amounted to aiding in illegal activities and destruction of evidence, justifying the penalty under Rule 26.

3. The Tribunal analyzed Rule 26 of the Central Excise Rules, 2002, which imposes a penalty on individuals dealing with excisable goods they know or believe are liable to confiscation. Considering the circumstances of the case, the Tribunal found that the appellant, as a booking agent, did not have knowledge of the duty status or description of the goods being transported. Since the appellant lacked the essential element of knowledge regarding the duty payment status of the goods, the provisions of Rule 26 could not be applied. Moreover, as the manufacturers involved were already exonerated, the Tribunal concluded that the penalty imposed on the appellant was unwarranted, setting aside the impugned order and allowing the appeal.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's interpretation of the relevant legal provisions, ultimately leading to the decision in favor of the appellant.