2012 (4) TMI 169 - AT - Customs

Search by the Revenue - certain quantity of needle and certain quantity of cannulae was found in the factory stating needle was manufactured and the cannulae was smuggled - demand in respect of needle and ordered confiscation of cannulae and imposed a penalty on the employee of company u/s 112 of the Customs read with Rule 209 of Central Excise Rules, 1944 appeal in respect of penalty - Held that - penalty imposed under Rule 209 of the Central Excise Rules is applicable in respect of manufacturer, producer or registered dealers in case there is contravention of any provisions of Rules. The appellant is an employee of company - penalty imposed is also not sustainable and is set aside.

Summary

Issues:
- Appeal against impugned order passed by Commissioner (Appeals) regarding penalty imposed under Customs Act and Central Excise Rules.

Analysis:
The judgment delivered by the Appellate Tribunal CESTAT, NEW DELHI involved an appeal filed by the appellant against the impugned order passed by the Commissioner (Appeals). The case revolved around the discovery of needles and cannulae during a search conducted by Revenue officers at the factory where the appellant was employed. The Revenue alleged that the needles were manufactured, while the cannulae were smuggled into India. The adjudicating authority confirmed the demand for the needles and ordered the confiscation of the cannulae, imposing a penalty of Rs.2 lakhs on the appellant under Section 112 of the Customs Act read with Rule 209 of the Central Excise Rules, 1944. The appellant then filed an appeal before the Commissioner (Appeals), who reduced the penalty to Rs.50,000.

Regarding the penalty under the Customs Act, Hi-Tech Needles (P) Ltd. and the Managing Director filed an appeal before the Tribunal. The Tribunal, in its order dated 11.1.2012, set aside the confiscation of cannulae, redemption fine, and penalties. The Tribunal found that the penalty imposed under Section 112 of the Customs Act was not sustainable in light of the earlier order. Additionally, the Tribunal analyzed the penalty imposed under Rule 209 of the Central Excise Rules, 1944. It was observed that Rule 209 applies to manufacturers, producers, or registered dealers in case of contravention of any provisions of the Rules. Considering that the appellant was an employee of Hi-Tech Needles (P) Ltd. working under the direction of the Managing Director, the Tribunal concluded that the penalty imposed under Rule 209 was also not sustainable and, therefore, set it aside. Consequently, the appeal was allowed, and the penalties under both the Customs Act and the Central Excise Rules were overturned.