Order Date- 08 June 2022

Facts:

• The appellant, Shri Anil Dudalal Kaneria, was imposed with penalty of Rs.5 Lacs on the ground that the appellant has failed to account for the manufactured goods properly and on visit of the officers, the excess goods were found which was lying unaccounted hence goods were confiscated and redemption fine and penalty was imposed. 
• The learned Commissioner (Appeals) has stated that the appellant had in possession the physical goods namely, polished vitrified Tiles without being accounted for in Central excise records for clearing the same from the factory premises without issuance of Central Excise Invoice and without payment of Central excise duty. Thus, it had been proved that Shri Anil Dudalal Kaneria, Chairman and MD of the appellant company, had committed acts of contraventions of the provisions of the Central Excise Law 
• This appeal is directed against Order-In-Appeal wherein, in the case of appellant the penalty imposed under Rule 26 of Central Excise Rules, 2002 was upheld by the learned Commissioner (Appeals).

Issue:

• Whether personal penalty can be imposed on the Chairman and MD of the company on the ground that the appellant has failed to account for the manufactured goods properly?

Order:

• The Tribunal find that the appellant in his statements recorded by the investigating agency nowhere stated that the goods found excess in the factory were lying for clandestine removal therefore, the serious allegation made by the department that the goods were kept for clandestine removal without payment of duty is not supported by any evidence.
• It was further observed that the appellant has stated in their statement that the unaccountal of goods is due to mis-match and cessation of the factory and the concerned staff has left the job therefore, even though the goods were found unaccounted for which the company has been imposed with redemption fine and penalty, personal penalty cannot be imposed on the Chairman and MD of the company who is not looking after the accountal of the goods manufactured. 
• The only lapse on the part is that being the Chairman and MD of the company, he not ensured that the proper accounting of the finished goods is being done or not for has which a token penalty can be imposed.
• Therefore, reduced the penalty from Rs. 5 Lacs to Rs.1 Lac. The impugned order stands modified and the appeal is partly allowed.