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of <h1>Appeal Success for Former Directors in Excise Penalties Case</h1> <h3>MEHUL ROADWAYS Versus COMMISSIONER OF CENTRAL EXCISE, BHAVNAGAR</h3> MEHUL ROADWAYS Versus COMMISSIONER OF CENTRAL EXCISE, BHAVNAGAR - 2009 (246) E.L.T. 660 (Tri. - Ahmd.) Issues involved: Confirmation of duty diversion, imposition of penalties u/s Rule 26 of Central Excise Rules, 2002.Confirmation of duty diversion: The judgment pertains to four appeals arising from an impugned order confirming duty diversion by M/s. Shree Saibaba Copper Private Limited. The duty on imported raw material was alleged to have been diverted to the open market instead of being used for the proposed purpose. Two appellants challenged penalties imposed on them, while two transporters contested penalties for transporting goods with incorrect descriptions.Imposition of penalties u/s Rule 26: The two appellants, former directors of M/s. Shree Saibaba Copper Pvt. Ltd., were penalized under Rule 26 of Central Excise Rules, 2002. The Commissioner imposed penalties based on alleged false information provided during the execution of a B-17 bond in 2002, even though the appellants had resigned from directorship prior to the period in question.Judgment details:- The appellants argued that they had resigned from directorship before the period in question and were not involved in the alleged contraventions. Statements from the appellants and others supported their claim of non-involvement during the relevant period.- The Commissioner's reliance on a statement alleging continued involvement of the appellants was deemed insufficient as the statement was contradicted by subsequent statements favoring the appellants. Lack of corroborating evidence led to the conclusion that penalties on the appellants were unjustified.- Regarding the transporters, it was found that they transported goods with incorrect descriptions or without proper documentation, indicating knowledge of the goods' tainted nature. Penalties on the transporters were reduced due to their subordinate role under the 100% EOU's instructions.The appeals of the two appellants against penalties were allowed, while penalties on the transporters were reduced but upheld. The judgment was pronounced on 19th May 2009 by the Appellate Tribunal CESTAT, Ahmedabad.
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