Tribunal grants stay, waives pre-deposit condition, and stays penalty recovery for Director.

The Tribunal granted the stay application, waived the pre-deposit condition of the penalty, and stayed the recovery of the penalty amount imposed on the appellant, the Director of a company, under Rule 26 of the Central Excise Rules, 2002. The Tribunal found no evidence implicating the appellant in issuing incorrect invoices or abetting excise duty evasion, concluding that the appellant had a strong prima facie case warranting the waiver. The appeal was directed to be listed along with connected appeals for further proceedings.

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Issues:
1. Waiver of pre-deposit of penalty under Rule 26 of the Central Excise Rules, 2002.

Analysis:
The appellant, who is the Director of a company, supplied a machine to the main assessee, leading to the imposition of a penalty of Rs. 20 lakhs for allegedly abetting the evasion of excise duty by misdescribing the machine in the invoice. The appellant sought a waiver of the pre-deposit condition, arguing that there was no evidence of his involvement in any conspiracy or collusion for evading excise duty. It was contended that the appellant was not responsible for issuing the invoice and that no penalty was imposed on the company despite a show cause notice being issued. The appellant's counsel pressed for the waiver based on these grounds.

The Joint Commissioner of Central Excise opposed the plea for waiver, alleging that the appellant intentionally misdescribed the machine supplied. He referred to the appellant's statement admitting that the machine was wrongly described in the invoices. The Tribunal considered both sides' arguments and examined the record to reach a decision.

The penalty was imposed on the appellant under Rule 26 of the Central Excise Rules, 2002, which pertains to certain offenses related to excisable goods. The Tribunal analyzed the provisions of Rule 26, highlighting that the appellant's case did not fall under either clause (1) or (2) of the rule. It was noted that the appellant did not deal with excisable goods but only supplied the packing machine. Regarding clause (2) of Rule 26, it was observed that there was no evidence implicating the appellant in issuing the incorrect invoices or abetting any wrongdoing. The Tribunal found no proof of the appellant's involvement in a conspiracy or abetment of excise duty evasion. Consequently, the Tribunal concluded that the appellant had a strong prima facie case warranting the waiver of the pre-deposit condition for the penalty amount.

In light of the analysis, the Tribunal granted the stay application, waived the pre-deposit condition of the penalty, and stayed the recovery of the penalty amount. The appeal was directed to be listed along with connected appeals for further proceedings.

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