TMI Blog2001 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently penalty can be imposed in terms of Rule 173Q of the CER. He submitted that the issue involved herein has been settled in a number of cases including in the case of Bhillai Conductors (P) Ltd. v. CCE, Raipur reported in 2000 (125) E.L.T. 781 (Tribunal) = 2000 (91) ECR 569 (T). In this connection he drew our attention to Para 32 as well as Para 51 of the order. They are as under :- Para 32 : "The charge levelled against the appellants is that fully manufactured goods were not entered in RG 1 register. According to the appellants, the impugned goods were manufactured on the very day the Officers visited and the same could not be entered because of quality test and they used to enter only after quality control test as it was the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it was shown that books of account were not maintained with an intention to evade payment of duty. Rule 173Q-1(b) cannot be read in violation and it should be read with other provisions of Rule 173Q particularly either with 173Q-1(a) or (d) to take penal action. In other words an action can be initiated under 173Q, if the goods have been removed in contravention of any of the Rules covered under 173Q-1(a) or if there was an intent to evade payment of duty under 1(d) and non-maintenance of books of account with reference to such excisable goods with an intent to evade payment of duty. For mere non-maintenance of accounts, an action cannot be taken under Rule 173Q and in fact neither show cause notice was issued under particular sub-clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither liable to confiscation and consequently no penalty can be imposed under Rule 173Q in the absence of any evidence to show that there was any intention to evade payment of duty. Since there was a failure on the part of the appellants inasmuch as not maintaining proper books of account, they are liable to penalty under Rule 226. Accordingly I propose to levy penalty of Rs. 2,000/- under Rule 226. In the view taken I propose to set aside the order of confiscation and penalty under Rule 173Q but penalty is leviable at Rs. 2,000/- under Rule 226." Para 51 : "I have considered the above submissions as well. Without going into the conflict of Rule 173Q versus Rule 226 visualised by the learned DRs, I may observe that even if it is as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that they were lessee up to 21-1-1994 only and since the date of seizure was on 11-9-1995, in no way they were connected with the goods. Nothing has been brought on record to show that they have got any role to play in not accounting the impugned goods. Similarly penalty of Rs. 10,000/- on M.D. is not justified. Since he was placed at Manipal whereas the appellants factory was situated at Mangalore. He submitted that he was not looking the day to day affairs and no evidence has been brought on record to show whether he has any role to play in the day to day activities of the Company. In support of his contention he relied upon the decision of the Tribunal in the case of TTK Prestige Ltd. Anr. v. CCE, Bangalore reported in 2000 (91) ECR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other words, quantum of penalty depended upon the gravity of the offence committed by the assessee. The Supreme Court has taken the view that penalty should not be levied for the sake of imposition of penalty and penalty also should not be the main source of revenue. In the present case, there is no clear finding by the adjudicating authority that there was an attempt to evade payment of duty. As can be seen from the records, redemption fine as well as penalty has been imposed for non-accounting the goods in the RG 1 Register. There is no iota of evidence to show that the party has attempted to remove the goods without payment of duty. In view of the facts and circumstances of the case, I am of the [view] that redemption fine is not justif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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