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2015 (1) TMI 624 - HC - Central ExciseClandestine clearance of goods - Imposition of penalty - Invocation of Rule 173Q and 209 of the Central Excise Rules, 1944 so as to impose penalty on the appellants - Held that:- The reliance on the final order of the Commissioner and the directions in that behalf of imposition of penalty cannot be faulted. Rules 173Q and 209 on which reliance is placed permits imposition of penalty on any manufacturer, purchaser, registered person of a warehouse or registered dealer responsible for removal of excisable goods in contravention of provisions of the rules and also without payment of duty, if any, leviable on the same. Once we find that there is no specific case as of the Central Excise Rules, then prevailing have not been contravened, and there is no intention to evade payment of duty, then, the argument of Shri Shah raised for the first time before us cannot be accepted. The findings are not based only on the admitted contravention of the rules with intention to evade payment of duty but also removal of excisable goods in contravention of the provisions of the rules themselves and not accounting the same. There is a clear case where both rules have been invoked and applied and merely because the duty liability is determined that is of M/s. S.R. Industries Ltd. and not of appellant No. 1, does not mean that in the facts and circumstances the imposition of penalty was not called for. The imposition of penalty was the cumulative effect of all the events and totality of the circumstances which enable the Commissioner to record the findings that fictitious entity was floated. It was shown to be export-oriented unit and though in its activity it did not require PTY/PFY, these goods were ordered for the alleged requirement of such unit. They were diverted firstly through the six units from Gujarat/Silvassa and by producing the documents and certifying and evidencing their supply for export-oriented unit and secondly in connivance with all concerned, such goods were diverted to Bhiwandi local market. In addition to their role in facilitating the other parties in diversion of such goods which were admittedly excisable that the penalty has been imposed, merely because the appellant No. 1 has not been held guilty of any evasion or non-payment of duty, does not mean that the penalty imposed was illegal and unjustified. - In the given facts and circumstances it could be for the positive act and it would also be for a collective failure of the obligations or rather active participation in bringing about this situation. Therefore the intention was to evade payment of duties. - no substantial question of law arises - Decided against assessee.
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