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2022 (8) TMI 1152 - AT - Central ExciseLevy of penalties u/r 26 of the Central Excise Rules - Clandestine Removal - Cigarettes - reliability upon the statements recorded and third party records - HELD THAT:- There are no case of transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any manner dealing with, any excisable goods, which he knows or has reason to believe are liable to confiscation under the Act or the rules thereunder, is made out. Accordingly, it is held that penalty under Rule 26 is not imposable on this appellant. Levy of personal penalty on Directors - it is alleged that these two were Directors of the company – M/s Musk Tobacco, when it was incorporated - HELD THAT:- Admittedly, these appellants have resigned from the Directorship Smt. Bushra Gupta on 25.01.2007 and Smt. Megha Gupta on 21.10.2005. Thus, it is found that these two Directors have resigned before commencement of production of cigarettes in June, 2007, which is not disputed. Thus, it is held that these two appellants had no role in transporting, removing, depositing, keeping, concealing, storing etc., as required for imposition of penalty under Rule 26 of the Central Excise Rules. Accordingly, the appeals are allowed and the penalty imposed are set aside. Sh. Vidyut Gupta - it is alleged that he along with his father Sh. Raj Kumar Gupta has played an active role in setting up of factory/ procurement of machine, monitoring of payment, monitoring of raw material supply etc. - HELD THAT:- Admittedly this appellant was neither a Director nor an employee of M/s Musk Tobacco. It appears that this appellant along with his father Sh. R. K. Gupta had provided the infrastructure and machinery for manufacture of cigarette to M/s Musk Tobacco. Further, they also gave guidance as and when required by the then Directors of M/s Musk Tobacco due to their experience in cigarette manufacturing. Considering the facts and circumstances and the documents on record, it is found that this appellant was not involved in day-to-day affairs of M/s Musk Tobacco and further was not involved in transporting, removing, depositing, keeping, concealing, etc., of excisable goods. Accordingly, the penalty imposed on this appellant is set aside. Sh. Shankar Lal Pradhan - It is alleged that this appellant was involved harbouring and safe keeping in records of clandestine production, clearance and procurement by M/s Musk Tobacco - HELD THAT:- This appellant is neither a Director nor an employee of M/s Musk Tobacco. Further, he is not connected either as a supplier or buyer of finished goods. Only he has provided space in his residence to store the documents of M/s Musk Tobacco, without any knowledge that this relates to clandestine production and removal by M/s Musk Tobacco. Further, this appellant has given a cogent explanation with regard to the documents, registers, loose papers etc. found at his residence that these are regarding “Indira Awas Yojna‟ and birth/ death record of the Gram Panchayat - this appellant is also not liable to penalty under Rule 26 of Central Excise Rules as he has not done nor has been concerned in transporting, removing, depositing, keeping, concealing, etc., of excisable goods. Accordingly, the penalty imposed on this appellant is set aside. The impugned order so far these appellants are concerned are set aside - appeal allowed.
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