2001 (6) TMI 447 - AT - Central Excise

Summary

Issues:
Application for waiver and stay of penalty under Rule 209A of the Central Excise Rules, 1944.

Detailed Analysis:

1. Violation of Rule 209A and Lack of Precision in Adjudicating Authority's Finding:
The case involves a manufacturer engaged in the manufacture of plastic parts of domestic mixers who was found to have sold goods in a clandestine manner to various parties. The appellant, a director of a purchasing company, was charged with violating Rule 209A of the Central Excise Rules. The appellant's counsel argued that the adjudicating authority's findings lacked precision and did not establish compliance with the requirements of Rule 209A. The counsel contended that the manufacturer, being an SSI unit, might not fall within the exemption category, and the goods purchased could potentially be exempt. Without a clear finding on the SSI exemption and the knowledge of the goods being liable for confiscation or penalty, the provisions of Rule 209A could not be deemed applicable.

2. Binding Effect of Co-Noticee's Statement:
The respondent argued that a partner of the manufacturer had admitted to selling goods to the appellant, which should be binding on the adjudicating authority. However, the appellant's counsel contested this argument, emphasizing the lack of specific findings regarding the applicability of Rule 209A in the case. The statement by the co-noticee alone was deemed insufficient to establish the appellant's liability under Rule 209A without meeting the necessary parameters.

3. Prima Facie Consideration for Stay Petition:
The Tribunal, while considering the stay petition, focused on the applicability of Rule 209A to the case. It noted that for the rule to apply, it must be established that the person acquiring or dealing with excisable goods knew or had reason to believe that the goods were liable for confiscation. The Tribunal found that the adjudicating authority had not conclusively determined whether the goods were excisable or if the alleged purchaser had the requisite knowledge regarding confiscation liability. Without meeting these essential criteria, the Tribunal concluded that there was no violation of Rule 209A. Consequently, the Tribunal granted a waiver for pre-payment of the penalty and stayed the recovery during the appeal's pendency, considering the appellant had presented a strong case based on the lack of findings on crucial aspects of Rule 209A.