Tribunal upholds penalty for duty evasion, grants reduction to company & director.

The Tribunal confirmed the penalty against the company for removal of goods without duty payment, upholding the imposition of an equivalent penalty on the Director. The company's request for a 25% penalty reduction was accepted, with the Tribunal granting the benefit based on legal precedents. The penalty on the Director was reduced to 1,25,000 due to the harshness of the initial penalty amount, and both parties were directed to pay their respective reduced penalties in accordance with the Central Excise Rules and CEA provisions.

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Issues:
- Confirmation of penalty against the company
- Imposition of penalty on the Director

Confirmation of Penalty Against the Company:
The case involved a search operation at the factory premises of the Appellant resulting in the recovery of incriminatory documents related to the removal of goods without payment of duty. A show-cause cum demand notice was issued, alleging clandestine manufacture and removal of goods without duty payment. The demand was confirmed against the company with equivalent penalty imposed on the Director under Rule 26 of Central Excise Rules, 2002. The Ld. Commissioner (Appeals) upheld the order, leading to the present appeals. The company did not dispute the duty and penalty but contested the penalty imposition process. The company sought the benefit of a 25% penalty reduction, which was accepted by the Revenue. The Tribunal found the company eligible for the benefit of discharging 25% of the penalty imposed under section 11AC of CEA, 1944, considering previous legal precedents.

Imposition of Penalty on the Director:
Regarding the penalty on the Director, the Revenue argued that the penalty was rightly imposed based on evidence showing the Director's awareness of the clearance of goods without payment of duty. The Director had accepted and ratified statements admitting the clearances without duty payment. The Tribunal acknowledged the Director's involvement but deemed the penalty equal to the duty amount too harsh. In the interest of justice, the penalty on the Director was reduced to &8377; 1,25,000 under Rule 26 of Central Excise Rules, 2002. The company was allowed to pay 25% of the penalty imposed under section 11AC of CEA, 1944, while the Director was directed to pay the reduced penalty amount. The appeals were disposed of based on these terms.

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