2005 (9) TMI 363 - AT - Central Excise

Summary

Issues:
Appeal against personal penalty imposed on Managing Director under Rule 209A of Central Excise Rules, 1944.

Analysis:
The appeal was filed by the Department against the Order-in-Appeal that set aside the penalty imposed on the Managing Director by the Adjudicating Authority. The issue revolved around the non-accountal of steel tubes and pipes in the factory where the Managing Director was responsible. The Tribunal proceeded with the matter despite the absence of the Respondent. The Department argued that the penalty was justifiable as per Rule 209A. However, upon examining the records, it was found that the show cause notice did not contain any specific allegation against the Managing Director regarding the non-accountal of goods. The Tribunal emphasized that for the penalty under Rule 209A to be imposed, it must be established that the individual was directly involved in dealing with excisable goods with knowledge of their liability to confiscation. In this case, it was determined that the Managing Director was not directly responsible for the day-to-day accounting of goods, and therefore, the penalty could not be upheld. Consequently, the appeal filed by the Department was dismissed.

This judgment highlights the importance of establishing a direct link between the individual's actions and the violation in cases involving personal penalties under Rule 209A. It emphasizes the need for specific allegations and evidence to hold a Managing Director accountable for excise violations. The decision underscores the legal principle that penalties should be imposed based on clear and substantiated evidence of individual involvement in the wrongdoing.