2013 (11) TMI 1199 - AT - Central Excise

Waiver of Pre-deposit Penalty on Individuals under Rule 26 of CE Rules 2002 - Held that - The statements recorded of all the assessees indicate that they had received the goods under some delivery challan - Though, the delivery challan is not a duty paying document, there is no further statement recorded of the current appellant to indicate that they had knowledge that the goods are liable for confiscation and are non-duty paid Following Pharmica Vs CCE Thane 2007 (3) TMI 443 - CESTAT, MUMBAI - there being no finding that the goods received by the appellant are liable for confiscation and the appellant had knowledge of such liability for confiscation - Prima facie the appellant has made out a case for the waiver of pre-deposit of amount till the disposal stay granted.

Summary

Issues:
Waiver of pre-deposit of penalties under Rule 26 of Central Excise Rules, 2002.

Analysis:
The judgment pertains to Stay Petitions filed for the waiver of pre-deposit of penalties imposed on individuals under Rule 26 of Central Excise Rules, 2002. The adjudicating authority had imposed penalties on the individuals on the grounds that they were aware that the goods received by them were liable for confiscation. However, upon reviewing the records and statements of the assessees, it was noted that while the goods were received under a delivery challan, there was no indication that the individuals were aware of the non-payment of duty or that the goods were liable for confiscation. The judgment highlighted the need for a finding by the adjudicating authority regarding the liability for confiscation, even if some motive was attributed to the individuals. The legal contentions raised by the Departmental representative were considered, emphasizing that ignorance of the law could be addressed at the final disposal of appeals. As there was no finding that the goods received were liable for confiscation and the individuals had knowledge of such liability, the Tribunal found that a prima facie case for the waiver of pre-deposit of penalties was established. The decision was supported by a previous Stay Order of a co-ordinate Bench in a similar situation (Pharmica Vs CCE Thane 2007 (213) ELT 124 (Tri-Mumbai)).

In conclusion, the Tribunal allowed the applications for the waiver of pre-deposit of penalties, staying the recovery thereof until the disposal of appeals. The judgment emphasized the importance of establishing liability for confiscation and knowledge of such liability when imposing penalties under Rule 26 of the Central Excise Rules, 2002. The decision underscored the need for a thorough examination of the facts and legal contentions before penalizing individuals in such cases.