2015 (10) TMI 1187 - AT - Central Excise

Duty demand - Imposition of penalty - Suppression of facts - Held that - Tribunal remanded the matter to the Adjudicating authority to reconsider the imposition of penalty on the partner. In the impugned order the Commissioner observed that the Appellants had filed wrong declarations with wilful suppression of actual manufacturing process carried out by them and suppressing the nature and quality of the fabric manufactured by them and mis-declaring their actual classification with intent to evade payment of duty. - role of the partner was not indicated in the Show Cause Notice. In the present case the Adjudicating authority had given the detailed finding on the role of the partner and therefore the case laws are not applicable. The learned Advocate submitted that the Tribunal had remanded the matter for reconsideration of imposition of penalty on the partner. - quantum of penalties on the partners are excessive. - Penalty reduced - Decided partly in favour of assessee.

Summary

Issues:
Appeal against imposition of penalties under Central Excise Rules.

Analysis:
The appeals were filed against penalties of Rs. 5 lakhs each imposed on the partners of a partnership firm. The Adjudicating authority confirmed the duty demand and interest but dropped the penalties on the partners. Both the partnership firm and the Revenue appealed against this decision. The Tribunal upheld the demand of duty with interest and reduced the penalty on the partnership firm to Rs. 5 lakhs. However, the Tribunal remanded the matter to consider imposing penalties on the partners.

The Advocate for the Appellants cited High Court cases stating that no penalty should be imposed on partners if a penalty is already imposed on the partnership firm. On the other hand, the Revenue's Representative argued that the partner's role in wrong availment of SSI exemption was crucial, referencing various legal decisions supporting their stance.

The Tribunal observed that the Adjudicating authority had detailed findings on the partners' involvement in misdeclaration and evasion of duty. The Commissioner noted that the partners had willfully suppressed information and misdeclared their manufacturing process and fabric quality. The Tribunal directed the Commissioner to re-quantify the demand within the normal limitation period and examine the partners' role for penalty imposition.

The Advocate did not dispute the facts but relied on High Court decisions where partner roles were not indicated in the Show Cause Notice. However, the Adjudicating authority had provided detailed findings on the partners' involvement, making the cited case laws inapplicable. The Tribunal had already reduced the penalty on the partnership firm in the remand order, indicating that the penalties on the partners were excessive. Consequently, the penalties on the Appellants were reduced to Rs. 50,000 each, and both appeals were disposed of accordingly.