https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=759724 https://www.taxtmi.com/caselaws?id=759724 Compounded lavy scheme - Penalty u/r 26 of the Central Excise Rules 2002 - alleged contravention committed by SMFPPL of operating the Pan masala Packaging Machines differently from that declared by SMFPPL under Rule 6 of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008 - based merely on statements of various persons - cross-examination of statements denied - violation of principles of natural justice - HELD THAT:- The entire case of the department is based merely on statements of various persons however, the cross-examination was denied by the Commissioner despite specific request to grant such cross-examination was made. Hence, no reliance can be placed on such statements as laid down in the following judgments that, as provided in Section 9D of the Central Excise Act 1944, a Statement of any person recorded under the said Act, shall be relevant in adjudication only when such person is examined in the adjudication proceedings. The ground on which the Commissioner has imposed penalty on the Appellants does not satisfy the ingredients of Rule 26 of the Central Excise Rules 2002. It is an admitted fact that the Appellants were not made parties to Show Cause notice dated 9-9-2011, which proposed confiscation of the goods and imposition of penalty on SMFPPL. The Appellants were made party only to Show Cause Notice dated 31-8-2012 which demanded duty from SMFPPL by interpreting the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008. This Show Cause Notice dated 31-8-2012 proposed imposition of penalty on the Appellants under Rule 26 of the Central Excise Rules 2002. As held by this Hon ble Tribunal in Meenakshi Food Products (P) Ltd v CCE [ 2019 (7) TMI 904 - CESTAT AHMEDABAD ] , the said Rule 26 can apply only to a person who is involved in the clearance of goods by different ways enumerated under Rule 26, whereas in the present case, duty demand had been made on interpretation of the Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules 2008. There is no evidence and finding of the Appellants role in acquiring, possessing or being concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with exciseble goods with knowledge or reason to believe that the same were liable to confiscation under the Central Excise Act 1944 or the Central Excise Rules 2002. Therefore, imposition of penalty under Rule 26 is liable to be set aside - impugned Order imposing penalty upon the appellants, J M Joshi and Sachin J Joshi cannot be sustained. Therefore penalty imposed upon the appellants under Rule 26 is hereby set aside. As regards, the appellant namely Vinayak Kashiram Sawant, the Director of SMFPPL, it appears from the records that he looked after Silvassa plant of SMFPPL, further Dilip Jani, Director of SMFPPL ,Gandhinagar has admitted that he was looking after production and clearance of goods at Gandhinagar factory. As such, it is found that he was not concerned with the activities of SMFPPL, Gandhinagar. In that view, penalty imposed upon him under Rule 26 is hereby set aside. The appeals of JM Joshi, Sachin J Joshi and Vinayak Kashiram Sawant are allowed and appeal filed by Balraj Mourya is partly allowed. Case-Laws Central Excise Tue, 01 Oct 2024 00:00:00 +0530