2005 (3) TMI 306 - AT - Central Excise

Summary

Issues:
Penalty under Rule 209A for obtaining forged documents and Modvat credit, Confiscation of plant and machinery under Rule 173Q(2) and its relation to personal penalties under Rule 209A.

Analysis:
The judgment pertains to two appeals filed by a partnership firm and its partner penalized under Rule 209A. The penalties were imposed as the appellants, traders of iron and steel, were accused of obtaining subsidiary gate passes through forged duty paying gate passes. The tribunal noted the absence of a provision similar to Section 132 of the Customs Act, 1962 in the Central Excise Act, 1944 or its rules. It was held that the act of obtaining fraudulent documents through inducement did not warrant a penalty under the Central Excise Rules for the partnership firm and its partner.

The tribunal deliberated on the submission regarding confiscation under Rule 173Q(2) of plant and machinery, linking it to the personal penalties under Rule 209A. However, it was reasoned that confiscation of plant and machinery did not equate to confiscation of excisable goods, as the former may not be excisable. The penalties imposed were deemed unjustifiable, leading to their setting aside and allowing the appeals filed by the partnership firm and its partner.

In conclusion, the judgment highlights the importance of distinguishing between excisable goods and non-excisable items like plant and machinery in the context of penalties under Rule 209A. The tribunal's decision emphasizes the need for specific provisions to govern penalties for obtaining forged documents and the careful consideration of confiscation actions in relation to liabilities and penalties under relevant rules.