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2016 (11) TMI 770 - AT - Central ExciseClassification of goods - HDPE stripes/tapes is subject to classification under CETH 3920.32 - Penalty - benefit of notification No.221/86 and 217/86 whether is admissible to appellant? - Held that: - he final products should be stripes and like of synthetic textile material falling under CETH 5406.90. But the goods manufactured by the appellant was falling CETH 3920.32 relying on the decision of the Madhya Pradesh High Court as stated above. In para-15 of the order, the authority has recorded that the said notification relates to captive consumption for which that is not available to input viz. HDPE tapes since the final product of the appellant was HDPE fabrics. Accordingly, on merit, there is no scope to grant any relief to the appellant. When the gravity of the matter is looked into, there shall be penalty under Rule 173Q of Central Excise Rules, 1944 since clandestine removal was established. Further, the quantum of penalty imposed appears to be on a higher side in absence of mens rea being brought on record. Therefore, the penalty of ₹ 2 lakhs imposed under that Rule is reduced to ₹ 1,00,000/- In so far as penalty of ₹ 2 lakhs and ₹ 1 lakh imposed respectively on Shri S.R. Selvaraj, Managing Partner and Shri G. Sugumar, Manager is concerned, there was an established case of clandestine removal of excisable goods unaccounted. Therefore, imposition of penalties on both the persons who were instrumental to the clandestine removal is confirmed. In so far as penalty of ₹ 10,000/- each on the four partners are concerned, it appears that the firm having suffered penalty as above under Rule 173Q, there shall be no penalty on these partners - appeals allowed. Appeals disposed off.
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