2000 (11) TMI 266 - AT - Central Excise

Appellate Tribunal reduces penalty for Central Excise violation, deems partnership firm and partner as one entity.

The Appellate Tribunal CEGAT, Mumbai reduced the penalty imposed on a mill and its partner for violating Central Excise Acts and Rules from Rs. 80,000 to ... Penalty for violation of Central Excise Acts and Rules - reduction of penalty on appeal - imposition of penalty under Rule 209A - liability of partnership firm and partnersPenalty for violation of Central Excise Acts and Rules - reduction of penalty on appeal - Whether the penalty imposed on the assessee should be sustained or reduced - HELD THAT: - The Tribunal found that violation of the Central Excise Acts and Rules had occurred and duty was payable, thereby justifying imposition of a penalty. The adjudicating authority had imposed a penalty of Rs. 80,000, which was reduced by the appellate authority to Rs. 50,000. Having considered the matter, the Tribunal exercised its appellate power to further reduce the penalty and substituted Rs. 25,000 in place of Rs. 50,000 as the appropriate levy of penalty on the assessee. [Paras 1]Penalty imposed on the mills reduced from Rs. 50,000 to Rs. 25,000.Imposition of penalty under Rule 209A - liability of partnership firm and partners - Whether a penalty under Rule 209A may be imposed on the partner in addition to the partnership firm - HELD THAT: - The Tribunal held that, for the purposes of imposing penalty under Rule 209A where the assessee is a partnership firm, it is not necessary to treat the firm as distinct from its partners for imposing an additional penalty on a partner. The Tribunal concluded that it would not be legally correct to impose a separate penalty on the partner when the assessee is a partnership firm, and accordingly modified the impugned order to remove the penalty ascribed to the partner. Consequential reliefs, if any, were left to follow according to law. [Paras 2]Penalty imposed on the partner deleted; order modified to not impose penalty on the partner.Final Conclusion: The Tribunal affirmed that a penalty is legally sustainable for the recorded violation but reduced the penalty on the assessee to Rs. 25,000 and deleted the separate penalty imposed on the partner under Rule 209A, with consequential reliefs to follow as per law. The Appellate Tribunal CEGAT, Mumbai reduced the penalty imposed on a mill and its partner for violating Central Excise Acts and Rules from Rs. 80,000 to Rs. 25,000. The Tribunal clarified that it is not necessary to impose a penalty on the partner separately as the partnership firm and partner are considered the same legally.