Order Date: 30 August 2022

Facts-

• The Appellant, Himanshubhai Nandlal Jagani (broker) has submitted that the case of clandestine removal was made against the main party M/s Asian Industries solely on the basis of the documents recovered from them.
• The same documents were relied upon in other companies such as M/s Bansal Castings Pvt. Ltd. and Kiran Ispat Udyog in those cases also, and the appellant was imposed penalties under Rule 26. 
• This Tribunal earlier in both the cases has not only set aside the penalty on the appellant but also dropped the demand in case of Bansal Castings Pvt. Ltd. 
• In view of this Tribunal earlier decision, the Appellant contends that penalty in the present case also deserves to be set aside. 
• The Revenue submitted that there is a clear admission of the appellant about clandestine removal of goods made by Asian Industries Pvt. Ltd. and the appellant was directly involved himself in facilitating the clandestine removal, therefore, the penalty was rightly imposed under Rule 26. 
• The appellant has challenged the imposition of penalty under Rule 26 of Central Excise in this appeal.

Issue-

• Whether the penalty imposed under Rule 26 is sustainable?

Order-

• The Tribunal observed that since the main party Asian Industries has not filed an appeal, the clandestine removal of goods and demand of excise duty against the main party cannot be gone into. The Tribunal further observed that the identical cases were made out against many parties on the basis of records such as a diary recovered from the present appellant. In that diary, names of various manufacturers, suppliers were appearing. Relying on the said documents, the case of Bansal Casting Pvt. Ltd. was also made out. In that case this Tribunal vide giving a detailed finding conclusively held that the documents recovered from Shri Himanshubhai Nandlal Jagani (Broker) is not sufficient to hold that the manufacturers have cleared the goods clandestinely.
• Further, it was held that the evidence recovered from the present appellant was also earlier not accepted as evidence to establish the clandestine removal of goods by the manufacturer. Once the same records were not accepted by this Tribunal as evidence, the same cannot be accepted in other cases such as the present case. This Tribunal in the case of appellant has set aside the penalty imposed under Rule 26, since the facts of those cases and the present case and even the evidence relied upon are exactly common in all these cases.
• Thus, it was held that the penalty under Rule 26 upon the appellant is not sustainable. Hence, the penalty is set aside and appeal is allowed.