TMI Blog2015 (1) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... se, Rules 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged. We are, thus, unable to hold that appellant was not liable to pay any penalty. Appellant diverted the imported scrap without any documents for manufacturing of excisable goods by M/s. Chamak, who clandestinely removed without payment of duty. So, the appellant company by supplying the goods without documents made easier to M/s. Chamak in manufacturing and clearing the goods clandestinely which are liable to confiscation under the Act or Rules. Hence, imposition of penalty under Rule 209A is warranted. Thus, both the issues raised by the learned Counsel are not sustainable. The learned Counsel had not contested the imposition of penalty on merit. - Decided against assessee. - E/00165/2003 - Final Order No. 40367/2014 - Dated:- 4-7-2014 - Shri P.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission finally settled the case total duty liability of ₹ 10,69,833/-, which was paid by M/s. Chamak. It has also granted immunity from confiscation, penalty and prosecution to M/s. Chamak. 3.3 But, the appellant, filed appeal before Commissioner (Appeals). By the impugned order, the Commissioner (Appeals) upheld the adjudication order and rejected the appeal filed by the appellant. 4. The learned Counsel on behalf of the appellant submits that the adjudicating authority had not given proper opportunity of hearing, as well as, relied upon documents were not supplied. He submits that these issues were raised before the Commissioner (Appeals), who has not considered. He submits that both the orders were passed in gross violation of the principles of natural justice. 4.1 It has been alleged in the Show Cause Notice that the appellant had supplied the goods to M/s. Chamak, who manufactured the goods and cleared clandestinely without payment of duty. It is submitted that they have not dealt with the goods, in any manner, which were manufactured and clandestinely removed by M/s. Chamak, as alleged. Rule 209A of the erstwhile Rules, would apply in the case, where any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r manner deals with, any excisable goods, which he knows or has reason to believe are liable to confiscation under the Act or these Rules, shall be liable to a penalty not exceeding the duty on such goods or ten thousand rupees, whichever is greater. 6.1 It is contended by the learned Counsel that the word person as mentioned in Rule 209A of the erstwhile Rules would not cover a Public Limited Company, the appellant herein, as held by the Larger Bench of the Tribunal in the case of Steel Tubes of India Ltd. v. Commissioner of Central Excise, Indore reported in 2007 (217) E.L.T. 506 (Tri.-LB). It has been held that Rule 209A is providing penalty to a person to be held responsible for act, or natural person, by lifting such corporate veil acting beyond the offence, such as, the Manager is liable to penalty and not the Corporation, who has no mind of its own and cannot knowingly deal with confiscation of the goods. The relevant portion of the said decision is reproduced below :- 9. As regards the second issue in reference it can be noticed that the Rule 209A pre-supposes a knowledge as to the liability of the confiscation of the goods which being transported etc. It was argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the conclusion reached by the Tribunal in the case of Indian Roadways Corporation Ltd. (supra) is also correct and does not require any reconsideration. 6.2 The Hon ble Supreme Court in the case of Madhumilan Syntex Ltd. v. Union of India reported in 2007 (210) E.L.T. 484 (S.C.) held that the company is not a natural person but legal or juristic person, cannot be ordered to suffer imprisonment, other consequences but would ensue e.g., payment of fine, etc. The relevant portion of the said decision is reproduced below :- 23. It is no doubt true that company is not a natural person but legal or juristic person. That, however, does not mean that company is not liable to prosecution under the Act. Corporate criminal liability is not unknown to law. The law is well settled on the point and it is not necessary to discuss it in detail. We may only refer to a recent decision of the Constitution Bench of this Court in Standard Chartered Bank Ors. v. Directorate of Enforcement Ors., (2005) 4 SCC 530 = JT (2005) 5 SC 267. In Standard Chartered Bank, it was contended on behalf of the company that when a statute fixes criminal liability on corporate bodies and also prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account the extent of culpability. In this regard reliance has been placed on order of this Court dated 5-7-2010 in CEA No. 125 of 2010, Commissioner of Central Excise, Chandigarh-I v. M/s. Lalit Steel and Agro Industries making distinction in the matter of quantum of penalty between person who wrongly availed of the Cenvat credit and the person who merely issued invoice on the basis of which cenvat credit was wrongly availed. To consider the rival submissions, we may refer to the relevant rules which are as under :- Rule 25. Confiscation and penalty. - (1) Subject to the provisions of Section 11AC of the Act, if any producer, manufacturer, registered person or a warehouse or a registered dealer; - (a) remove any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage or any excisable goods without having applied for the registration certificate required under Section 6 of the Act; or (d) contravenes any of the provisions of these rules or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was concerned in selling or dealing with the goods which were liable to confiscation inasmuch as the appellant claimed to have sold the goods in respect of which the Cenvat credit was taken. In such a case, Rules 25(1)(d) and 26(1) are also applicable. The person who purports to sell goods cannot say that he was not a person concerned with the selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty. The appellant issued invoices without delivery of goods with intent to enable evasion of duty to which effect a finding has been recorded and which finding has not been challenged. We are, thus, unable to hold that appellant was not liable to pay any penalty. 7.3 In the present case, the appellant diverted the imported scrap without any documents for manufacturing of excisable goods by M/s. Chamak, who clandestinely removed without payment of duty. So, the appellant company by supplying the goods without documents made easier to M/s. Chamak in manufacturing and clearing the goods clandestinely which are liable to confiscation under the Act or Rules. Hence, imposition of penalty under Rule 209A is warranted. Thus, both the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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