Personal penalty for central excise duty evasion upheld where officers actively ated in the scheme.

Personal penalty under Rule 26 of the Central Excise Rules, 2002 was considered leviable where company officers were shown to have knowledge of, and active association with, a duty evasion scheme involving splitting work into bare pipes and coating activity and making misleading statements about removal and storage of goods. The factual record was treated as sufficient to attribute individual responsibility for conduct contributing to the evasion, and the existence of penalty on the company was not treated as excluding personal liability. On that basis, penalties on the Managing Director and the Vice President (Commercial) were upheld.

---

---

Issues: Whether penalties under Rule 26 of the Central Excise Rules, 2002 were imposable on the Managing Director and the Vice President (Commercial) for their role in the evasion of Central Excise duty.

Analysis: The respondents were found to be aware of and in the manner in which the assessee split the work into bare pipes and coating activity and made misleading statements regarding removal and storage of goods. The factual record showed their active association with the modus operandi adopted to evade duty, and the existence of penalty on the company did not exclude personal liability where their conduct contributed to the evasion.

Conclusion: Penalties under Rule 26 were held to be leviable on both respondents, and the Revenue's appeal succeeded.

---