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TMI Blog2017 (9) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law, which reads thus : " Whether in the facts and circumstances of the case and in law, the CESTAT is correct to hold that the ingredients of Rule 209A of Central Excise Rules, 1944 under which the penalty has been imposed in this case are attracted only if the persons concerned have physically dealt with excisable goods with the knowledge or belief that such goods were liable to confiscation & that the provisions are not attracted unless the person concerned has physically dealt with such goods" 2. The facts in brief that arise in the present Appeal are as under : 3. Respondent No. 1 is a partnership firm of which Respondent No. 2 is the Work Manager and Respondent No. 3 is a Partner and responsible for the day today affairs, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise, MumbaiIII, (now Thane - I) vide order in original dated 29 April 1997, disallowed the modvat credit of Rs. 47,10,546.65 and imposed a penalty of Rs. 10,00,000/each on Respondents No. 1 and 2 and Rs. 5,00,000/on Respondent No. 3 under Rule 209A of the said Rules. 5. The Respondents being aggrieved by the order in original dated 29 April 1997 filed Appeals in CESTAT. The CESTAT initially dismissed the Appeals by order dated 31 August 2004 for non prosecution. However, the same were restored subsequently by the CESTAT vide order dated 4 January 2006 in view of the explanation given by the Respondents that they did not receive notice for hearing of Appeal. The CESTAT vide impugned order dated 7 March 2006 allowed the Appeals filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 451 in support of this finding. 9. Having heard the parties, we are of the view that the only question of law which would arise for determination is whether Rule 209A of the said Rules under which the penalty has been imposed is attracted only when the person has physically dealt with the excisable goods with the knowledge or belief that the goods were liable to confiscation. Rule 209A of the said Rules reads thus : " Rule 209A. Penalty for certain of fences. Any person who acquires possession of, or is 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the given situation, if the assess is only issuing invoices wherein there is no movement of the goods, they cannot be visited with penalty under rule 209A." 11. From the above judgment, it is clear that Rule 209A can be invoked and the penalty imposed only when the person has physically dealt with the excisable goods with the knowledge or belief that the goods are liable for confiscation. In the present case, the allegation was of unused gate passbooks being misused by the Respondents for the purpose of issuing fake/forged gate passes to assist M/s. Singhal Swaroop Ispat Ltd. There was no case of the Respondents having physically dealt with the excisable goods with the knowledge or belief that such goods were liable to confiscation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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