2010 (1) TMI 426 - AT - Central Excise

Penalty- The Appeal by Department against the order of the Original Authority in not imposing separate penalties on the Managing Director, Director and Project In-charge of the respondent-company. Held that- no evidence refuting factual finding by Commissioner (Appeals) relied upon. Department not even cited them as respondent. Held that- appeal by department against concurrent finding of lower authorities in favour of said person rejected.

Summary

Issues:
Department's appeal against non-imposition of penalties on Managing Director, Director, and Project In-charge of the respondent-company.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi was filed by the Department challenging the order of the Commissioner (Appeals) rejecting the appeal against the Original Authority's decision not to impose separate penalties on the Managing Director, Director, and Project In-charge of the respondent-company. The Original Authority confirmed a duty demand along with interest and imposed penalties on the respondent-company but dropped the proceedings against the three individuals. The Department sought penalties on these individuals, leading to an appeal before the Tribunal. The Tribunal considered the submissions and records, noting the absence of evidence showing knowledge or intention on the part of the individuals regarding the company's evasion. The Commissioner (Appeals) found that the individuals had used a brand name with mutual consent, which led to the goods being liable for confiscation and losing exemption benefits. However, it was observed that the individuals were not aware of the consequences and believed they were entitled to the exemption. The Tribunal upheld the findings of the lower authorities, rejecting the Department's appeal against the individuals.

The Tribunal's decision was based on the lack of evidence proving the individuals' knowledge or intention regarding the evasion by the company. The Commissioner (Appeals) highlighted that the individuals used the brand name to enhance marketability, not to evade duty, and were under the impression that they were entitled to the exemption. The Tribunal emphasized that the Department did not present any evidence refuting the factual findings of the Commissioner (Appeals) and had not even cited the individuals as respondents. Ultimately, the appeal by the Department against the lower authorities' decision in favor of the individuals was rejected. The order was dictated and pronounced in open court on 14-1-2010.