2008 (2) TMI 700 - AT - Central Excise

Summary

Issues involved: Imposition of penalty u/s Rule 26 of Central Excise Rules, 2002 on corporate entity for aiding and abetting in clandestine removal of goods.

Summary:
The Appellate Tribunal CESTAT, Mumbai heard appeals against the penalty imposed on the appellants for clandestinely removing goods. The ld. Commissioner (Appeals) upheld the penalty, citing the gravity of the offence and the appellant's role in aiding subsequent evasion of duty. The appellants argued lack of evidence and cited settlement of a separate show cause notice for immunity from penalties. The issue revolved around penalty imposition u/s Rule 26 for aiding in unaccounted manufacturing and removal of excisable goods. The penalty was imposed based on the appellants supplying non-duty paid goods to the purchaser. However, Rule 26 provisions did not squarely apply to the appellants as they had settled a separate show cause notice. The Tribunal noted that Rule 26 penalties can be invoked against individuals, not corporate entities, as per precedent. Consequently, the impugned penalty imposition on the corporate entity was deemed unsustainable and set aside, allowing the appeal with any consequential relief.

*(Judgment pronounced on 27-2-2008)*