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2019 (5) TMI 1143 - AT - Central ExciseClandestine removal - Bags and Soft Luggage items - Penalty imposed u/s 26 of CER - Demand based on statements of Directors - HELD THAT:- When the officers of DGCEI visited the premises of the factory, they found 1806 Nos of bags which were not accounted for with intent to clear without payment of duty. Further, these bags were not seized from outside the factory premises or during transit and that were seized from the factory premises. Therefore, In view of Rule 4 of Central Excise Rules, duty is payable only at the time of clearance of goods from the factory and in this case, there was no clearance of the said goods from the factory addressing presumptions that they were not accounted with intent to clear without payment of duty is not tenable in law. With regard to the demand of ₹ 1,73,625/- on 1479 Nos of bags, the appellant during the pendency of this appeal had paid the duty of ₹ 1,73,625/- along with interest of ₹ 1,01,423/-. In view of the said payment of duty, I hold that the appellant could not prove by cogent and convincing evidence that they were not clandestinely removing the said goods therefore the duty on 1479 Nos of bags amounting to ₹ 1,73,625/- is confirmed. Penalty on Directors - HELD THAT:- Penalty under Rule 26 of the Central Excise Rules is imposable on any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or the Rules but there is no evidence in the present case that the Directors in their individual capacity were guilty of any omissions and commissions mentioned in the Rule - Essentially, in the present case unintended lapses were there and hence the imposition of personal penalty on the Directors is not justified. Appeal allowed in part.
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