2009 (4) TMI 354 - AT - Central Excise

Penalty-the respondent is the Director of M/s. Sahibabad Chemicals & Fertilizers (P) Ltd. The Central Excise Officers ascertained shortage of the raw materials and finished goods involving central excise duty of Rs.1, 01, 248/- The respondent company deposited the duty on 16-2-2005. The Original Authority confirmed the demand of duty and appropriated the amount as deposited by the Company and also imposed penalty of equal amount each on the Company and the respondent herein. The Commissioner (Appeals) set aside the penalty on the respondent. Held that- However the Executive Director the respondent herein admitted the shortage and explained the reasons that the goods were cleared without payment of duty. Apart from that the Company was penalised under Section 11AC of the Act. Therefore the Commissioner (Appeals) rightly set aside the penalty on the respondent. Accordingly I do not find any reason to interfere the order of the Commissioner (Appeals) on setting aside the penalty on the respondent. The appeal filed by the Revenue is rejected.

Summary

The Appellate Tribunal CESTAT, New Delhi, in the case of Revenue vs. M/s. Sahibabad Chemicals & Fertilizers (P) Ltd., heard an appeal filed by the Revenue against the order of the Commissioner (Appeals) that set aside a penalty imposed under Rule 26 of the Central Excise Rule, 2002 on the respondent. The respondent, who is the Director of the company, was found to have shortages of raw materials and finished goods involving central excise duty. The Central Excise Officers confirmed the duty demand and imposed penalties on both the company and the respondent. The Commissioner (Appeals) set aside the penalty on the respondent, citing lack of evidence of his knowledge of the alleged clandestine removal of goods. The Tribunal upheld the Commissioner's decision, noting that the respondent admitted the shortages but there was no proof of his involvement in the removal of goods without payment of duty. Therefore, the appeal filed by the Revenue was rejected, and the penalty on the respondent was set aside. The order was pronounced on 16th April 2009.