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Issues involved: Imposition of penalty under Rule 209A of the Central Excise Rules, 1944 on the appellant for alleged evasion of duty on soap manufactured by its subsidiary.
Summary: 1. The appeal challenged the penalty of Rs. 60 Lakhs imposed on the appellant u/s 209A of the Central Excise Rules, 1944, following a finding of a differential duty payable by its subsidiary. The demand was confirmed u/s 11A(1) of the Central Excise Act, 1944. 2. The appellant contended that the duty imposition was illegal as the soap consignments were cleared at assessable value approved under price lists. It was argued that evasion of duty cannot occur when goods are cleared as per approved prices. Reference was made to a Tribunal decision and exemption under Section 112 of the Finance Act, 2000. The absence of findings on confiscation liability was highlighted. 3. The penalty was imposed u/r 209A of the Central Excise Rules. The records were examined, and submissions from the learned SDR were considered. 4. Despite the defense based on the Finance Act, 2000, which validates duty demands, the absence of a finding on confiscation liability and knowledge of such by the appellants rendered the penalty unsustainable. The penalty was set aside, and the pre-deposit was ordered to be refunded to the appellants.
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