Same corporate entity movement of goods: confiscation and separate abetment penalty not justified, while uncontested duty penalty stood.

An uncontested duty demand was sustained, and the consequential penalty under Section 11AC was also confirmed. For goods moved between the manufacturing and trading units of the same company within the same premises boundary, confiscation and redemption fine were held unnecessary, and the penalty under Rule 173Q was reduced. A separate penalty under Rule 209A for abetment was set aside because the manufacturing and trading units were not distinct persons in law, and a corporate body cannot abet its own act. Partial relief was therefore granted.

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Issues: (i) whether the duty demand and penalty under Section 11AC were sustainable when the assessee did not press the challenge to the duty determination; (ii) whether confiscation of the goods and the redemption fine, together with penalty under Rule 173Q, could be sustained where the movement of goods was within the same corporate boundary; and (iii) whether a separate penalty under Rule 209A could be imposed on the same corporate body for abetment.

Issue (i): whether the duty demand and penalty under Section 11AC were sustainable when the assessee did not press the challenge to the duty determination.

Analysis: The duty component was not contested and was expressly not pressed. Once the duty demand remained unchallenged, the related penalty predicated on that duty demand was also liable to stand.

Conclusion: The duty demand and the penalty under Section 11AC were confirmed.

Issue (ii): whether confiscation of the goods and the redemption fine, together with penalty under Rule 173Q, could be sustained where the movement of goods was within the same corporate boundary.

Analysis: The goods moved from the manufacturing unit to the trading unit of the same company within the same premises boundary. In that setting, confiscation of the goods and the redemption fine were considered unnecessary. The penalty under Rule 173Q was found excessive and was reduced.

Conclusion: The confiscation and redemption fine were set aside, and the penalty under Rule 173Q was reduced to Rs. 50,000/-.

Issue (iii): whether a separate penalty under Rule 209A could be imposed on the same corporate body for abetment.

Analysis: The manufacturing unit and the trading unit were not separate persons in law but the same corporate body. A person cannot abet its own act, so a distinct abetment penalty on the same entity was not maintainable.

Conclusion: The penalty under Rule 209A was set aside.

Final Conclusion: The duty demand and the penalty linked to that demand were left intact, but the confiscation, redemption fine, reduced Rule 173Q penalty, and the separate abetment penalty were interfered with to the extent indicated above, resulting in only partial relief to the assessee.

Ratio Decidendi: Where the manufacturing and trading units are parts of the same corporate entity acting within the same boundary, confiscation and a separate abetment penalty are not justified on the footing of distinct persons, though an uncontested duty demand and consequential statutory penalty may be sustained.

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