2017 (5) TMI 283

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....he facts of the case are that the appellant is a fully owned subsidiary of M/s. Homag Finance GMBH Germany, a subsidiary of M/s. Homag Holzbearbeitungssysteme GMBH, which in turn is held by M/s. Homag Group AG, Germany, an agglomeration of companies based in Germany. The manufacturing company is manufacturing various types of wood Working machineries and spare parts falling under Chapter subheading 8465 95 00 and 8466 92 00 of the First Schedule to CETA, 1985. The trading company is a non-exclusive dealer of the manufacturing company in the territory of India working on a principal to principal basis although both are interconnected undertakings. Claiming to have gathered some intelligence that the manufacturing company is undervaluing its ....

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.... Rules, 2002, no penalty can be imposed on the company. He further submitted that the provisions of Rule 26(1) is attracted only when the noticee accused has the knowledge or reason to believe that the offending goods are liable to confiscation, whereas in the instant case, neither there was a proposal to confiscate any goods in the show-cause notice nor an order of confiscation of any goods. He also submitted that the department itself did not have any reason to believe that the alleged offending goods were liable to confiscation and under these circumstances, it cannot be said that the appellant had any reason to believe that the goods were liable to confiscation. For this submission, he relied upon the decision in the case of CC, Bangalo....

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....ow: "Rule 26. Penalty for certain offences. - (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whichever is greater. (2) Any person, who issues - (i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or (ii) any other document or abets in making such document, on the basis of which the user of said invoi....