2019 (9) TMI 115 - HC - Central Excise

High Court remands case for fresh examination on penalty liability under Rule 26

The High Court remanded the case back to the Tribunal for a fresh examination to determine the liability for penalty under Rule 26 of the C.E. Rules, ... Admissibility of appeal - imposition of penalty on the Company as well as its Director, without complying the provision u/r 26 of CER, 2002 - HELD THAT:- Perusal of order would reflect that no discussion has been made with regard to imposition of penalty at all. The matter requires re-examination on the question whether the appellant was liable to pay the penalty or not after determining the matter under the provision of Rule 26 of the C.E. Rules, 2002 - appeal allowed by way of remand. Issues Involved: Determination of liability to pay penalty under Rule 26 of the C.E. Rules, 2002 based on involvement in dealing with excisable goods liable to confiscation.Detailed Analysis:1. Admission of Appeal: The Central Excise Appeal was filed against an order by the Customs, Excise and Service Tax Appellate Tribunal, Allahabad. The appeal was admitted on specific questions enumerated in the memo of appeal, with the appellant seeking to press question (d) related to Rule 26 of the C.E. Rules, 2002.2. Violation of Rule 26: The High Court noted that the penalty had been confirmed on the company and its director without proper compliance with Rule 26 of the C.E. Rules, 2002. The rule specifies the liability for penalty on individuals dealing with excisable goods known or believed to be liable for confiscation, without exceeding the duty on such goods or rupees ten thousand, whichever is greater.3. Lack of Discussion on Penalty Imposition: The Court observed that the order by the Tribunal did not include any discussion regarding the imposition of the penalty. This lack of detailed consideration led the Court to conclude that a re-examination of the matter was necessary to determine the liability for penalty under Rule 26.4. Remand for Re-examination: Considering the above, the Court remanded the matter back to the Tribunal for a fresh examination to determine the actual involvement of the appellant as per Rule 26 in order to impose the penalty. The Tribunal was directed to provide the appellant with an opportunity for a hearing and due notice within the next three months in accordance with the law.5. Disposition of the Appeal: The High Court disposed of the appeal with the above observations, emphasizing the need for a proper determination of liability for penalty under Rule 26 of the C.E. Rules, 2002 based on the involvement of the appellant in dealing with excisable goods liable for confiscation.