2023 (6) TMI 694 - AT - Central Excise

Appellate Tribunal reduces penalty for DGM Finance in duty evasion case

Rajesh Mangal Versus C.C.E. & S.T. -Ahmedabad-III

Rajesh Mangal Versus C.C.E. & S.T. -Ahmedabad-III - TMI Issues involved:The issue involved in this case is the imposition of penalty under Rule 26 of the Central Excise Rules, 2002 on the present appellant in relation to a case against M/s. Electrotherm (India) Ltd for excise duty demand.Summary:Issue 1: Imposition of penalty under Rule 26The appellant, working as DGM Finance with M/s. Electrotherm (India) Ltd, was imposed with a penalty of Rs. 10 lacs under Rule 26 of Central Excise Rules, 2002. The appellant contended that he had no role in the non-payment of duty by the company as the removal of goods was handled by another individual, Shri S.G. Pathak. The appellant argued that he had not given any statement in his personal capacity, only on behalf of the Director. The appellant challenged the penalty imposition citing lack of specific sub-rule or clause invocation. After considering the submissions, the Tribunal found that while the appellant was not directly involved in the evasion of duty, as DGM Finance, he was responsible for all transactions recorded in the books of accounts. The Tribunal reduced the penalty from Rs. 10 lacs to Rs. 1 lac, showing leniency towards the appellant.Issue 2: Adjudication and argumentsThe appellant's counsel submitted that the main case of M/s. Electrotherm (India) Ltd had been settled under SVLDRS-2019, with duties paid as required. The appellant had no direct involvement in the evasion of duty and should not be penalized under Rule 26. The revenue's representative argued that as DGM-Finance, the appellant was responsible for all transactions, including recording sales in the books of accounts, making him aware of the company's affairs. Both sides presented judgments supporting their arguments.ConclusionThe Tribunal acknowledged the appellant's limited role in the evasion of duty but held him accountable due to his position as DGM Finance. Considering the facts of the case, the Tribunal reduced the penalty imposed on the appellant from Rs. 10 lacs to Rs. 1 lac, showing leniency. The impugned order was modified accordingly, and the appeal was partly allowed.This summary highlights the key arguments, findings, and the ultimate decision of the Appellate Tribunal CESTAT AHMEDABAD regarding the imposition of penalty under Rule 26 in the case involving M/s. Electrotherm (India) Ltd.