2026 (4) TMI 795

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....ise Rules, 2002 [the 2002 Rules] read with rules 17 and 18 of the Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008. 2. The Additional Director General (Adjudication) has imposed penalty upon the appellant under rule 26 for the following reasons: "Penalty Proposal upon Shri Anil Prithwani, Proprietor of M/s Mohit Traders, Raipur:- It has been alleged in the SCN(s) that Shri Anil Prithwani, Proprietor of M/s Mohit Traders, Raipur was engaged in trading of Pan Masala/Gutkha of Nazar brands including other brands, Jeera, Supari etc. in his firm for trading the same. He was purchasing Nazar brands of Gutkha manufactured in the unregistered factory at Bastar without bills during the relevant perio....

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....s, it will be appropriate to reproduce the same and it is reproduced: "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 rupees ten thousand, whichever is greater: PROVIDED that where any proceeding for the person liable to pay duty have been concluded under clause (a) or clause (d) of sub-section (1) of section 11AC of the Act in respect of duty, interest and pen....

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....tinent to refer to the judgment of the Delhi High Court Rakesh Kumar Garg Vs. Commissioner of Central Excise-2016(331) E.L.T. 321 (Del.) which deals with rule 26 of the 2002 Rules. The observations of the Delhi High Court are as follows: "48. The present appeals essentially concern the role of the three appellants and whether the penalty levied on them under Rule 26 of the CE Rules, 2002 and Rule 209A of the CE Rules, 1944 was justified. 49. Rule 209A of the CE Rules, 1944 was more or less similarly worded. These are penal provisions that call for a strict interpretation. Therefore, in order that penalty may be levied, it will have to be satisfactorily proved that the ingredients of Rule 26 of the CE Rules, 2002 are existe....