2000 (8) TMI 137 - AT - Central Excise

Appellate Tribunal Upholds Duty, Lifts Penalties on Firm and Partner

The Appellate Tribunal upheld duty liability of M/s. Agro Engineers but set aside penalties imposed on the firm and its partner. The firm was found liable ... Confirmation of duty demand - penalty under Rule 173Q - penalty under Rule 209A - partner's liability in a partnership - duty evasionConfirmation of duty demand - duty evasion - Whether the duty demand against the firm for amounts collected from customers but not remitted to the Central Government is sustainable - HELD THAT: - The firm did not dispute the assessed duty liability and the Tribunal accepted the concession. The material finding is that excisable goods were cleared after realising duty from customers but the amounts were not passed on to the Central Government. On that factual foundation the demand for duty amounting to Rs. 6,24,407.88 was confirmed by the Tribunal. [Paras 2]The duty demand of Rs. 6,24,407.88 against the firm is confirmed.Penalty under Rule 173Q - duty evasion - Whether the penalty of Rs. 2 lakhs imposed on the firm under Rule 173Q is excessive or requires interference - HELD THAT: - The Tribunal assessed the penalty in light of the established fact that the firm had collected excise duty from customers and failed to remit it to the Central Government. Having regard to the amount of duty evaded, the Tribunal held that the penalty imposed under Rule 173Q does not call for interference and, in fact, is on the lighter side. No factual or legal basis was shown to warrant reduction or interference with the penalty imposed on the firm. [Paras 3]The penalty of Rs. 2 lakhs imposed on the firm under Rule 173Q is upheld.Penalty under Rule 209A - partner's liability in a partnership - Whether a partner can be penalised under Rule 209A where the partnership firm has already been penalised for the same default - HELD THAT: - The Tribunal found no justification for imposing an additional penalty on the partner after the partnership firm itself was subjected to penalty. Applying the principle that liability already visited upon the firm does not justify a separate penalty on an individual partner in the circumstances of this case, the Tribunal set aside the penalty imposed on the partner under Rule 209A. [Paras 4]The penalty of Rs. 50,000 imposed on the partner under Rule 209A is vacated.Final Conclusion: The appeal by the firm is dismissed and the duty demand and penalty under Rule 173Q on the firm are sustained; the appeal by the partner is allowed and the penalty imposed on him under Rule 209A is vacated. The Appellate Tribunal upheld duty liability of M/s. Agro Engineers but set aside penalties imposed on the firm and its partner. The firm was found liable to pay duty of Rs. 6,24,407.88. Penalty of Rs. 2 lakhs under Rule 173Q was confirmed. Partner's penalty under Rule 209A was vacated. Appeal by the firm was dismissed, while the partner's appeal was allowed.