9911796707
TMI Blog2008 (4) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... f the erstwhile Central Excise Act, 1944 considering the total realization for the clandestine clearances found against the assessee as cum-duty value. He modified penalty on the appellant-firm from Rs. 3 lakhs to Rs. 75,000/-. He vacated penalty of Rs. 50,000/- imposed under Rule 209A of the Central Excise Rules on one Shri N. Ramachandran by the original authority. 2. The facts of the case are that during 1-4-96 to 31-3-97 the assessee M/s. Poly Spinning Mills had cleared excisable goods 'HDPE sacks' without payment of duty. The assessee had claimed that they were eligible for the SSI exemption in respect of the said clearances. The original authority had found that the assessee had taken Modvat credit and therefore was not eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 was barred by limitation. It is also submitted that Shri N. Ramachandran who was in no way connected with the assessee firm was penalized under Rule 209A of the erstwhile Central Excise Rules, 1944 without any justification. The Counsel prays that the impugned order may be set aside. The Revenue has filed two appeals seeking to restore the penalty imposed by the original authority and to deny the benefit under Section 4(4)(d)(ii) allowed by the lower appellate authority. Another prayer is to restore the penalty imposed on Shri N. Ramachandran. It is submitted that the assessee and Shri N. Ramachandran are habitual offenders. 6. We have considered the case records and heard the submissions made by both sides. We find from the records that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with law. It is settled that penalty cannot be imposed just for the reason that the statute provides for it. It has to be established that the assessee was acting in defiance of law and its conduct was dishonest and contumacious. In the instant case the assessee's conduct has to be accepted as bona fide. Therefore when it is held that the assessee was not liable to pay any differential duty it has also to be held that it is not liable for any penalty. Therefore, the penalty of Rs. 75,000/- imposed on the assessee by the lower appellate authority is liable to be set aside. 7. We also do not find any reason to impose penalty on Shri N. Ramachandran who is not established to have committed any offence justifying such penalty. The Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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