2001 (2) TMI 156 - AT - Central Excise

Tribunal overturns penalty due to lack of evidence on appellant's involvement in duty evasion

ANIL KUMAR SAXENA Versus COMMISSIONER OF C. EX., MEERUT

ANIL KUMAR SAXENA Versus COMMISSIONER OF C. EX., MEERUT - 2001 (129) E.L.T. 351 (Tri. - Del.) Issues:Appeal against imposition of penalty on the appellant under Rule 209A of the Central Excise Rules, 1944.Analysis:The case involved an appeal against the imposition of a penalty on the appellant for alleged involvement in the confiscation of goods without payment of duty. The facts revealed that the truck carrying goods was intercepted, and discrepancies were found during the inspection. The Managing Director (MD) of the company was present during the incident, and the appellant, who was responsible for maintaining Excise records, denied involvement in preparing the invoice recovered by authorities. The appellant was issued a show cause notice (SCN) under Rule 209A, leading to the imposition of a penalty of Rs. 50,000.00.Appellant's Argument:The appellant's counsel argued that no concrete evidence was presented to establish the appellant's direct involvement or knowledge of the goods' confiscation. It was emphasized that the appellant's role was limited to maintaining records under the MD's direction, and no evidence linked the appellant to the alleged offense. The counsel contended that the penalty was unjustified without substantial proof of the appellant's awareness or participation in the illicit activities.Department's Submission:On the contrary, the Department's representative asserted that as the Excise Manager, the appellant held a position of responsibility that included overseeing goods movement and record maintenance. The Department argued that the shortages in goods could not have occurred without the appellant's knowledge or negligence. While acknowledging the absence of specific evidence, the Department relied on the assumption that the appellant, being in a managerial role, should have been aware of the irregularities, justifying the penalty imposition.Judgment:Upon reviewing the arguments, the Tribunal highlighted the necessity of proving the appellant's knowledge of the goods' confiscation for penalty imposition under Rule 209A. The Tribunal emphasized the requirement of positive evidence to attribute such knowledge to an individual, emphasizing that mere job title or position does not suffice. After examining the records, the Tribunal found no concrete evidence linking the appellant to the illegal activities or demonstrating his awareness of the goods' confiscation without duty payment. Consequently, the Tribunal concluded that the penalty imposition on the appellant was unwarranted, setting aside the order and allowing the appeal. The decision emphasized the importance of substantial evidence to establish liability under Rule 209A and granted consequential relief to the appellants.