Director penalty under Central Excise Rules reduced where company was in liquidation and contravention could not be precisely attributed.

Penalty on a director under Rule 26 of the Central Excise Rules, 2002 was reduced because the main company's appeal had already been dismissed as infructuous and the company was in liquidation, leaving no effective defence before the Tribunal. In these circumstances, the Tribunal found it difficult to precisely attribute the contravention to the director and held that the interests of justice warranted reduction. The penalty was therefore reduced from Rs. 1,50,000 to Rs. 15,000, and the appeal was allowed to that extent.

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Issues: Whether the penalty imposed on a director under Rule 26 of the Central Excise Rules, 2002 was liable to be reduced.

Analysis: The appeal of the main company had already been dismissed as infructuous and the company was in liquidation, leaving no effective defence before the Tribunal. In these circumstances, the Tribunal found it difficult to precisely attribute the contravention to the director and considered that the interests of justice would be served by reducing the penalty.

Conclusion: The penalty was reduced from Rs. 1,50,000/- to Rs. 15,000/- and the appeal was allowed to that extent.

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