2002 (2) TMI 224 - AT - Central Excise

Summary

Issues:
Violation of Rule 173Q, Section 11AC, and 209A of the Central Excise Rules.

Detailed Analysis:

Issue 1: Violation of Rule 173Q and Section 11AC
The case involved the manufacturing of copper rods by the assessee, leading to a discrepancy in the statutory register regarding the clearance of goods. The Commissioner confirmed the duty already paid and imposed a substantial penalty under Rule 173Q of the Central Excise Rules read with Section 11AC of the Central Excise Act. Additionally, penalties were imposed on other appellants for various violations. The Commissioner fixed fines on goods, truck, and plant machinery, along with ordering the encashment of a bank guarantee.

Issue 2: Violation of Rule 209A
The appellants contended that the Commissioner failed to discuss the culpability of officials under Rule 209A. They argued that the entry in the invoice reflected the importer's bona fides, citing the illness of the person in charge as an extraordinary circumstance. The imposition of penalties on directors and truck owners was challenged on the grounds of lack of knowledge or reason to believe the goods were liable for confiscation under Rule 209A.

Analysis of the Judgment:
The Tribunal considered the circumstances and noted that the mention of the relevant entry in the invoice indicated the lack of intent to violate the Central Excise Rules. Referring to a previous judgment, the Tribunal emphasized that penalties under Rule 209A cannot be imposed on employees who were not directly involved in dealing with the contraband goods. The Tribunal held that the proceedings against employees, directors, truck owners, and drivers were not justified due to their lack of knowledge or involvement in the contravention of the rules.

Conclusion:
The Tribunal found that the failure to make a debit entry in the register might have occurred without deliberate intent on the part of the company, given the circumstances of the officer's illness. Considering the lack of evidence of a deep-seated conspiracy, the Tribunal reduced the penalty on the company significantly. The confiscation of plant and machinery was set aside. Ultimately, one appeal was allowed in part, and the other appeals were fully allowed, providing relief to the appellants in various aspects of the case.