2000 (7) TMI 125 - AT - Central Excise

Partners' Appeals Allowed, Power of Attorney's Dismissed: Penalties Upheld

The appeals filed by the individual partners of a partnership firm against penalties imposed under Rule 209A of the Central Excise Rules were allowed by ... Penalty Issues:Appeal against penalty imposed under Rule 209A of the Central Excise Rules on appellants.Analysis:The appellants, a partnership firm and its partners, filed appeals against the penalty imposed by the Collector of Central Excise. The firm, engaged in the manufacture of Telecom powder, had shown less clearances than the actual clearance during 1985-86 and 1986-87. A demand was confirmed on the firm, and penalties were imposed on both the firm and the individual appellants under Rule 209A of the Central Excise Rules.The counsel for the individual appellants argued that they had no knowledge or reasonable belief about the goods being liable to confiscation. They contended that as partners, they were not involved in the day-to-day operations conducted by another individual. Citing relevant Tribunal decisions, the counsel argued that in the absence of evidence showing personal knowledge or reasonable belief, penalties under Rule 209A are not sustainable. The Tribunal agreed, finding that the penalties imposed on the individual appellants were not sustainable due to lack of evidence.On the other hand, the individual who was the Power of Attorney of the firm admitted to preparing statutory records without showing the actual clearances. It was established that he knowingly cleared goods to customers, collecting excise duty that was not deposited with the Revenue Department. The Tribunal found no merit in his appeal and upheld a penalty of Rs. 1.5 lakhs, considering the facts and circumstances of the case.Consequently, the appeals filed by the individual partners of the firm were allowed, while the appeal filed by the Power of Attorney was disposed of with the upheld penalty.