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TMI Blog2011 (1) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... the department could not prove that there was any attempt on the part of the appellant to remove the goods clandestinely. Therefore, the seizure and confiscation of these goods is not sustainable in law. As regards penalty on Shri Haresh Dharmani, Director of the assessee, the department failed to produce any evidence that he was in any way involved in the transportation / removal, etc. in respect of the goods in question - unable to produce any evidence regarding any direct involvement of the Director of the company. Therefore, penalty on the Director is not sustainable in law. So far as penalty under Section 11AC is concerned, no option was given to the appellant at the time of passing of the adjudication order. Therefore, optio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. of MS barrels. The goods and the vehicle were placed under seizure on the reasonable belief the goods were cleared without payment of Central Excise duty. Thereafter, a search was carried out at the premises of the manufacturer and the raw material and the finished goods lying in the factory unaccounted were detained under the reasonable belief that the same were to be removed for clandestine removal. The goods seized from the vehicle and the vehicle were released provisionally on execution of B-11 bond covered by bank guarantee. The department also carried out verification on 15/04/2006 in respect of the goods detained on 25/02/2006. The department found that the appellant had cleared certain goods (finished, semi-finished, raw materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Rules, 2002 for their involvement in the evasion of Central Excise Duty. 5. I hereby order to confiscation of the goods (Raw material finished) seized in the factory premises on 15-04/2006 valued at Rs. 14,61,498/- and goods seized on 25-02-2006 valued at Rs. 1,14,748/- under Section 115 of Customs Act, 1962/-. However, I give the option to the assessee to redeem the same on payment of fine Rs. 4,00,000/- (Rs. Four Lakh Only) as per the said Act." 4. The appellant submit that so far as Rs. 18,727/- is concerned they are not disputing the demand and appropriation of the said amount along with interest. Their disputes is in relation to Rs. 28,323/- which relates to 178 barrels which were subsequently cleared on payment of duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts vs. Commissioner of Central Excise, Pune - II 2009 (242) ELT 381 (Tri.-Mumbai), wherein it was held that management would not be aware of the misdemeanours of one of its employees and cannot claim relief as it does not exercise due diligence in discharge of its statutory obligations and further rely upon the decision of the Tribunal in the case of Gulabchand Silk Mills Pvt. Ltd. vs. Commissioner of Central Excise, Hyderabad - II 2005 (184) ELT 263 (Tri.-Bang.). 5. I have perused the record and considered the submissions. The appellant have conceded the confiscation of 150 barrels seized from the vehicle. Therefore, there is no infirmity in the adjudicating authority's order insofar as confiscation of these goods are concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence regarding any direct involvement of the Director of the company. Therefore, penalty on the Director is not sustainable in law. Duty involved on the goods seized from the vehicle is Rs. 18,727/-. However, penalty imposed is Rs. 4 lakhs which is not as per law. 5.3 So far as penalty under Section 11AC is concerned, no option was given to the appellant at the time of passing of the adjudication order. Therefore, option should be given to the appellant for payment of 25% of penalty in view of the Hon'ble High Court's judgment in the case of K.P. Pouches (P) Ltd. vs. Union of India (supra). Learned counsel has also contended that so far as 178 barrels are concerned they were not given the documents seized by the department which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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