Stay of Central Excise penalty refused where the Managing Director was found aware of under-valuation and duty implications.

Recovery of a penalty imposed under Section 209A of the Central Excise Act, 1944 was not stayed where the record indicated the Managing Director could not plausibly deny knowledge of the under-valuation pattern, depot sales at a higher price, and the resulting duty implication. The adjudicating authority had treated that knowledge as sufficient to sustain the penalty for goods liable to confiscation, and no acceptable ground was shown to justify interim protection. The request for stay was therefore refused and the appellant was required to pre-deposit the penalty.

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Issues: Whether recovery of the penalty imposed under Section 209A of the Central Excise Act, 1944 should be stayed and whether the appellant was entitled to interim protection against pre-deposit.

Analysis: The application for stay was considered on the available record as the applicant did not appear. The record showed that the applicant, as Managing Director of the company, could not claim ignorance of the under-valuation pattern, the sale of goods at a higher price at the depot, and the resulting duty implication. On that basis, the adjudicating authority had found that he had knowledge that the goods were liable to confiscation and that the penalty of Rs. 1 lakh had been validly imposed. No other acceptable ground was shown to justify staying recovery of the penalty.

Conclusion: The request for stay was refused and the applicant was directed to pre-deposit the entire penalty amount.

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