2002 (9) TMI 355 - AT - Central Excise

Summary

Issues:
1. Stay application for waiver of pre-deposit of penalty.
2. Confiscation of goods and imposition of penalty under Central Excise law.
3. Reduction of penalty by the Commissioner (Appeals).
4. Interpretation of Rule 209A of the Central Excise Rules, 1944.
5. Confiscation of the vehicle under the provisions of the Customs Act and Central Excise Act.

Analysis:
1. The matter was initially posted for hearing the stay application filed by an individual for waiver of pre-deposit of penalty. However, due to the narrow compass of the issue involved, the appellate tribunal decided to take up the appeal itself for disposal after granting a stay for the recovery of the penalty with the consent of the learned SDR representing the respondent.

2. The case involved the interception of a vehicle loaded with goods without proper excise documents by Central Excise Officers. The goods were seized, and penalties were imposed on various parties, including the appellants who owned the vehicle. The Dy. Commissioner confiscated the seized goods, demanded duty, and imposed penalties. On appeal, the Commissioner (Appeals) reduced the penalty imposed on the appellants.

3. The appellants argued that they were not directly involved in the wrongdoing as the goods were loaded by another party, and they were unaware of the nature of the goods being transported. The tribunal considered Rule 209A of the Central Excise Rules, which provides for penalties on individuals knowingly dealing with goods liable for confiscation. Since there was no evidence to prove that the appellants were aware of the nature of the goods, the tribunal ruled that no penalty could be imposed on them.

4. The tribunal also analyzed the provisions of the Customs Act and the Central Excise Act regarding the confiscation of vehicles used in the removal of excisable goods in contravention of rules. It was argued that the vehicle could only be confiscated if the owner proved lack of knowledge or connivance in the wrongful act. The tribunal found merit in the appellant's argument that the driver could not be expected to know the excise status of the goods being transported, especially when no invoice was provided.

5. Ultimately, the tribunal allowed the appeal, ruling in favor of the appellants by concluding that neither the vehicle nor the appellants were liable for confiscation or penalty due to the lack of evidence proving their knowledge or involvement in the wrongful transportation of excisable goods.