Rectification of mistake in penalty order led to reduction of personal penalty on the director.

An apparent mistake in the earlier final order was rectified because the operative portion had reduced the penalty only for one appellant and had not addressed the director's personal penalty. The note records that the goods were liable to confiscation, so personal penalty remained maintainable, but the penalty quantum on the director was considered excessive in light of the duty liability and circumstances already recorded. The personal penalty on the director was therefore reduced from Rs. 2,00,000 to Rs. 50,000.

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Issues: Whether the earlier order contained an apparent mistake warranting rectification and whether the personal penalty imposed under Rule 26 of the Central Excise Rules, 2002 required modification.

Analysis: The order found that the operative portion of the earlier final order had reduced the penalty only in respect of one appellant, but had not dealt with the penalty imposed on the director. It further held that the goods were liable for confiscation and, therefore, personal penalty under Rule 26 was maintainable. At the same time, considering the duty liability involved and the circumstances recorded in the earlier order, the quantum of penalty on the director was considered fit for reduction.

Conclusion: The mistake was rectified and the personal penalty on the director was reduced from Rs. 2,00,000/- to Rs. 50,000/-.

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