Partner penalty under Central Excise rules reduced after remand, as the Tribunal found the original quantum excessive.

Penalties on partners under Rule 209A of the Central Excise Rules, 1944 and Rule 26 of the Central Excise Rules, 2002 were examined in light of findings of wrong declarations, suppression of the manufacturing process, and misdeclaration of classification with intent to evade duty. The Tribunal noted that the earlier remand had limited the demand to the normal period of limitation and that the penalty on the partnership firm had already been reduced. In that context, the Tribunal held the partner-level penalties were excessive and reduced them to Rs. 50,000 each, modifying the penal liability accordingly.

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Issues: Whether the penalties imposed on the partners under Rule 209A of the Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2002 were justified and whether the quantum of penalty required reduction.

Analysis: The matter had earlier been remanded for reconsideration of penalty on the partners. The impugned order recorded findings regarding the partners' role in wrong declarations, suppression of the manufacturing process, and misdeclaration of classification with intent to evade duty. The earlier remand also had the effect of limiting the demand to the normal period of limitation and the penalty on the partnership firm had already been reduced. In that background, the Tribunal held that the penalties on the partners were excessive.

Conclusion: The penalties on the Appellants were not sustained at the original amount and were reduced to Rs. 50,000 each.

Final Conclusion: The appeals succeeded only to the extent of substantial reduction in penalty, and the matter stood finally disposed of with modified penal liability.

Ratio Decidendi: Where the partner's role is established, penalty may be considered, but the quantum must be proportionate to the limited scope of the surviving demand and the overall findings in the case.

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