2024 (5) TMI 64 - AT - Central Excise

Levy of Personal Penalty on the Director of the company and Drivers of the trucks (transporters) - Penalties u/r 26 of CER - Abetment - Clandestine removal - gutka - evasion of duty - reasons to believe - non-application of mind - non-speaking order - HELD THAT - It is true that the transporters and trucks drivers may or may not be very well educated. It is also a fact that every truck driver and transporter who transports commercial goods carries with him the Bill to cover the goods which he was transporting. Every driver takes this precaution because if there is a check by any authority on the way, he can show the Bills. Secondly, once the goods reach the destination he shows the Bills to the recipient and gets an acknowledgment that the goods in the Bills received. Therefore, no matter how less educated the driver might be, he will certainly know that he has to carry the goods only with the Invoice or Bill. Therefore, there are no force in the submissions of the appellant that the penalties imposed on them must be set aside. The penalties imposed under rule 26 on the appellants upheld - Appeal allowed.

Summary

Issues involved:
The issues involved in this judgment include evasion of duty, imposition of penalties, role of directors in transporting excisable goods, and imposition of penalties on transporters involved in transporting goods.

Evasion of Duty and Imposition of Penalties:
The case involved interception of trucks carrying non-duty paid gutka, leading to the identification of a network engaged in manufacturing and transporting the goods clandestinely. Show cause notices were issued to various co-noticees, including directors and transporters, alleging evasion of duty and proposing penalties.

Role of Director in Evasion of Duty:
One of the directors, Sunil Sarogi, contested the imposition of penalties on the grounds that he was a "dummy director" with no active role in the company's activities. Despite the Commissioner's findings, penalties were imposed on him. The appellant argued that he had resigned from the company before the seizures took place, and that he had no involvement in the alleged evasion.

Imposition of Penalties on Transporters:
Several transporters involved in transporting the clandestinely removed goods contested the imposition of penalties under Rule 26. They argued that they were only involved in booking for transport companies or were owners/drivers of the trucks, and were not directly involved in the illegal activities. However, the tribunal upheld the penalties on the transporters, stating that they should have been aware of the goods they were transporting and the necessary documentation required.

Decision:
The tribunal allowed the appeal filed by Sunil Sarogi, setting aside the impugned order in his case. However, all other appeals were dismissed, upholding the penalties imposed on the transporters under Rule 26. The judgment was pronounced on 30.04.2024 by the Appellate Tribunal CESTAT NEW DELHI.