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2019 (2) TMI 1168 - AT - Central ExcisePenalty u/r 26 of CER - Clandestine removal - only paper transaction and no physical dealing of the goods - Held that:- As per the facts of the case it is established that the supplier M/s. Hema Exports, under the guise of supplying goods to 100% EOU i.e. the present appellants, diverted the goods in the open market with clear intention to evade payment of duty. The diversion of the goods in the open market could not have been possible without the involvement of present appellants.As per the facts of the case it is established that the supplier M/s. Hema Exports, under the guise of supplying goods to 100% EOU i.e. the present appellants, diverted the goods in the open market with clear intention to evade payment of duty. The diversion of the goods in the open market could not have been possible without the involvement of present appellants. From Rule 26, it is clear that, if any person in any manner deals with any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or law shall be liable to penalty - In the present case, the appellants were very much involved in dealing with the goods in diverting by M/s. Hema Exports in the open market. Therefore, even though the goods were not dealt with physically but there is no dispute that the appellants were involved in dealing with the goods in a manner by which the supplier was facilitated in diversion of goods in open market - thus, the ingredients of Rule 26 are existing in the offence committed by the appellants. Penalty on other appellants, who are partners of a partnership firm - Held that:- Once the penalty was imposed on a partnership firm, no separate penalty should be imposed on the partners separately for the reason that the partnership firm itself is consisting of partners - penalty on partners set aside. Appeal allowed in part.
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