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TMI BlogOffence and Penalties under Central ExciseX X X X Extracts X X X X X X X X Extracts X X X X ..... ions of section 8 of CEA, which relates to 'restriction on possession of certain goods in excess of prescribed quantity'. 2. Contravening any of the provisions of section 37(2) - · Clause (iii) which relates to 'transit of excisable goods to any part of the country'. · Clause (xxvii) which relates to 'registration of person/ unit'. 3. Contravening any provisions of central excise act/ rules in relation to Cenvat credit. 4. Removing or concerning himself in removing any excisable goods in contravention of CE act/ rules. 5. Acquiring possession of or otherwise dealing (includes possession, transporting, storing, keeping etc.) in goods which is liable to confiscation under CE act/ rules. 6. evading payment of duty payable under CEA 7. Failure to supply information which is required under the Act or supplying false information 8. Attempting to commit or abetting commission of an offence regarding evasion of duty or transit of goods or restriction on storage of goods or non-registration of a unit. For the above offences following punishments has been imposed: - · Imprisonment upto 7 years and/ or fine, if, (a) duty leviable exceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travention of any of the rules and notification issued , 2. Non-accountal of any excisable goods produced or manufactured or stored, 3. Engaging in manufacture, production or storage of excisable goods without applying for registration certificate under section 6 of CEA. 4. Contravention of any provisions of Central excise rules or notifications issued under these rules with intent to evade payment of duty. For the above offences following punishments has been imposed: - · Confiscation of contravening goods. · Penalty upto duty payable on such contravening goods or ₹ 5000 whichever is higher. Points to be noted with respect to Rule 25 - · Rule 25 is applicable only to manufacturer, producer, registered person of a warehouse or registered dealer. · Notice imposing penalty must indicate the clause under which duty is payable, otherwise penalty may not be sustainable. · Non-accountal of goods will only be in respect of final goods manufactured and not of the raw material. · Penalty under rule 25 cannot be imposed unless duty payable is quantified. - Principal of natural justice will be followed by the Central Excise Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless duty payable is quantified. · Provisions of section 11AC override the provisions of rule 25. III. Penalty under rule 26 of CEA (also called personal penalty) As per Rule 26 of CEA, -any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or Rules, shall be liable to a penalty upto the duty payable on such goods or ₹ 5000, whichever is greater. -any person who issue or abate in making an excise duty invoice without delivery of the goods or in case on the basis of these invoices , person claim any duty benefits in the form of Cenvat credit or refund, shall be liable to a penalty upto the duty payable on such goods or ₹ 5000, whichever is greater. Points to be noted with respect to rule 26 · As per this rule, a director or partner or an employee or transporter will be personally liable to penalty if he is individually involved in clandestine removal etc. · Above mentioned persons can be held personally liable onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition to the goods, following conveyances are also liable to confiscation under section 115(1) of customs Act: - · Any conveyance from which goods are thrown over board or destroyed to prevent seizure by officer of customs. · Conveyance which is required by customs officers to land or stop for inspection but fails to do so. · Conveyance by which warehoused goods are cleared for export, but goods are unloaded without permission. · Conveyance carrying imported goods which has entered India and is afterwards found missing either in part or in full, unless the master of the vessel is able to account for the loss of or deficiency in goods. Points to be noted regarding confiscation of conveyance or goods · Conveyance used for transporting of contravening goods will not be liable to confiscation, if the owner of conveyance proves that the conveyance was used without the knowledge or connivance of the owner, his agent or person in charge of the conveyance. · If the owner of vehicle is not connected directly with smuggling, absolute confiscation is not justified and option to pay redemption fine not exceeding market price of the goods at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods only, it can issued to any person responsible for alleged contravention. · The owner of the goods shall be given an opportunity of being heard by making representation. · As per rule 28 of CEA, on confiscation goods becomes property of central Government. · As per rule 29 of CEA, if assessee opts not to pay fine in lieu of confiscation, the goods will be sold or destroyed or disposed off in such a manner as the commissioner may direct. · As per rule 30 of CEA, if assessee opts to pay fine in lieu of confiscation, he may be asked to pay storage charges for storing such goods by the excise officer. Redemption fine in lieu of confiscation Section 125 of customs act provides that whenever goods are confiscated, the adjudicating officer may give option to owner of goods to pay fine in lieu of confiscation. This is called redemption fine. Wrong confiscation of goods If goods which are confiscated are set aside by tribunal, the person is eligible to get back the goods. If however such goods are sold by the authorities, market value of such goods as on date of setting aside of the order of confiscation is payable to the owner of the goods (and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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