TMI Blog2019 (2) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly receipt of the goods on monetary considerations from the said supplier who used to divert goods to local market. After completion of investigation and issuance of show cause notice dated 31.03.2005 to various offenders/ notices including the appellants resulting the adjudication of the matter vide order-in-original dated 31.01.2014 wherein penalties were imposed on the appellants. Aggrieved by the impugned order-in-original, the appellants preferred the present appeals. 2. Shri Willingdon Christian, Ld. Advocate appearing on behalf of the appellants submits that penalties were imposed under Rule 26 of the Central Excise Rules. He submits that the case of the department is that there is only paper transaction and no physical dealing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, penalty under Rule 26 is rightly imposed on the appellants. 4. I have carefully considered the submissions made by both the sides and perused the record. I find that limited issue to be decided in the facts and circumstances of the case is whether the appellants are liable to penalty under Section 26 of Central Excise Rules, 2002. 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. The Rule 26 reads as under:- Rule 26. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be imposed on the partners separately for the reason that the partnership firm itself is consisting of partners. This issue has been considered by the jurisdictional High court in the case of CCE vs. Jai Prakash Motwani 2010 (258) ELT 204 (Guj) wherein it was held that once penalty was imposed on the partnership firm no separate penalty should be imposed on the partners. Considering the Hon'ble Gujarat High Court judgment, I set-aside the penalties imposed on the partners. As a result, the appeals filed by M/s. Al-Amin Exports and M/s. Sunshine Overseas bearing Appeal Nos. E/11865/2014-SM and E/11868/2014-SMC respectively, are dismissed and appeals filed by Shri Irfan Gulam Rasool Saiyed, (Appeal No. E/11866/2014-SMC), Shri Haroon R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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