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2019 (1) TMI 1424 - HC - Central ExciseImposition of penalty u/r 209A of CER on Directors - reason to believe - whether there is evidence of connivance of respondent with the nonexistence dealers as would make the Director liable for the penalty under Rule 209A of the Rules 1944 or not? - Held that:- As there was contradictory statement of the authorized signatory and the scrap broker, statement of Director of respondent No.1 was recorded on 12.06.1998 under Section 14 of 1944 Act. The Director deposed that the denial of Shri Praveen Maheshwari, the scrap broker, is not correct. He deposed that he is ready to cross-examine Shri Praveen Maheshwari - However, it appears from the record that no opportunity to cross-examine Shri Praveen Maheshwari was afforded. And as evident from the order dated 16.06.1999 passed by the Adjudicatory Authority, the statement of Shri Praveen Maheshwari was relied upon to arrive at a conclusion that the Director was knowing or had reason to believe that the entire transaction was fake. In the case at hand, the penalty under Rule 209A of 1944 Rules is attracted only when it is established that it was within the knowledge and has reason to believe that the excisable goods is not confiscable - The authorized signatory and Director has stated that the material was purchased through broker was “on for” basis in their testimony. The Director also sought leave to confront the broker who has denied any transaction and even receiving of cheque. No cogent material is commended at, as would establish the fact that the Director was afforded effective opportunity of hearing under Section 14 of the Act of 1944 to cross-examine the broker. Thus, the conclusion arrived at by the Tribunal on the given facts of the case cannot be said to be perverse, as would give rise to a substantial question of law as proposed. Appeal dismissed.
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