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of <h1>Tribunal Overturns Penalties; Lack of Evidence and Mens Rea in Central Excise Case Leads to Successful Appeals.</h1> <h3>KAMDEEP MARKETING PVT. LTD. Versus COMMISSIONER OF C. EX., INDORE</h3> KAMDEEP MARKETING PVT. LTD. Versus COMMISSIONER OF C. EX., INDORE - 2004 (165) E.L.T. 206 (Tri. - Del.) Issues Involved: Imposition of penalties under Rule 209A of the Central Excise Rules, 1944; Challenge to penalties based on lack of reliable evidence and violation of natural justice.Imposition of Penalties under Rule 209A:The appellants were penalized under Rule 209A for involvement in fraudulent activities related to Modvat credit and excisable goods. The Commissioner found various appellants to have connived or dealt with goods in a manner that facilitated fraudulent activities. However, the Tribunal noted that for a penalty under Rule 209A to be valid, it is essential that the person physically dealt with excisable goods knowing they were liable for confiscation. The Tribunal referenced previous decisions to support this interpretation. In this case, it was argued that there was no finding that the appellants had physically dealt with excisable goods in the specified manner, thus questioning the basis for imposing penalties.Violation of Natural Justice:In Appeal Nos. 1997-2000, a challenge was raised regarding the violation of natural justice by the Commissioner. It was alleged that the order was passed without giving the appellants an opportunity to be heard personally. The Commissioner's observations regarding the lack of response from the appellants to show cause notices and hearing notices were noted. The Tribunal found that these observations were not contested in the appeals, leading to the conclusion that the plea of violation of natural justice was not sustainable in those cases.Decision and Findings:The Tribunal emphasized the requirements for imposing penalties under Rule 209A, highlighting the need for physical involvement with excisable goods and the presence of mens rea. The Commissioner's findings were scrutinized, and it was concluded that the essential elements for penalty under Rule 209A were not established in this case. Additionally, penalties imposed on individuals as partners of firms were deemed unsustainable based on established legal principles. Consequently, the Tribunal set aside the penalties imposed on the appellants and allowed the appeals.
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