1 cexa20.11.sxw ssm IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO. 20 OF 2011 Kishan K. Agrawal ...Appellant. Vs. The Commissioner of Central Excise and Customs, Nasik ...Respondent. Mr. Prakash Shah i/by PDS Legal for the Appellant. Ms. Suchitra Kamble for the Respondent. CORAM :- DR. D.Y. CHANDRACHUD AND ANOOP V. MOHTA, JJ. DATE :- 26 JULY 2011. P.C. :- This Appeal arises out of an order passed by the Customs, Excise and Service Tax Appellate Tribunal on 10 February 2010 by which the penalty that was imposed on the Appellant Shri K.K. Agarwal in his capacity as Director of Nasik Strips Private Limited in the amount of `2,04,529/- has been confirmed. The Appeal is admitted on the following substantial questions of law:- “(a) Whether penalty can be imposed upon the Appellant under Rule 26 of the said Rules when confiscation of goods is not alleged in the show cause notice? (b) Whether penalty can be imposed under Rule 26 of the rules under the facts and circumstances of the 2 cexa20.11.sxw ssm present case?” 2 At the hearing of this Appeal, the limited submission which has been urged by counsel for the Appellant is that the Tribunal has not dealt with the submissions which were urged on behalf of the Appellant while assailing the penalty which is imposed upon him. In order to appreciate the submission, it would be necessary to extract from the order of the Tribunal in paragraph 3 (B) which sets out the submissions which were urged by the Appellant. The following submissions have been recorded by the Tribunal as having been urged before it on behalf of the Appellant. “iii. There is neither any averment in the impugned notice nor there is any finding on the part of the lower authorities that the Appellant had dealt with or was in any way concerned with any goods which were liable for confiscation. iv. As per the provisions of Rule 26 of the Central Excise Rules 2002, as existing at the relevant period (September 2002) 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 (emphasis supplied) shall be liable to a penalty not exceeding the duty on such goods or rupees ten thousand whichever is greater. It is not the Department’s case that the HR Trimmings removed by M/s. JISCO Ltd. were liable for confiscation. Furthermore from the 3 cexa20.11.sxw ssm plain reading of Rule 26 it is manifest that penalty under Rule 26 is imposable if excisable goods have been rendered liable for confiscation under the Act or the Central Excise Rules 2002. No contravention of the Central Excise Act or the Central Excise Rules 2002 is alleged or averred against the Appellants. Thus, the invocation of the provisions of Rule 26 of the Central Excise Rules 2002 against the aforesaid Appellant is mis-conceived and unsustainable. It is thus submitted that the impugned order upholding penalty under Rule 26 of the Central Excise Rules 2002 is unsustainable and deserves to be set aside.” 3 The Tribunal, while dealing with the case of the Appellant however observed as follows:- “(B) K K AGARWAL DIRECTOR OF M/S. NSPL : the only contention of the appellant is that the appellant has not dealt physically with the impugned goods and in that situation no penalty under Rules 26 of the Central Excise Rules, 2002 can be imposed on the appellant and there is no allegation against the appellant the only allegation against the appellant company only. In the case of Dr. Writers Food Products reported in 2009 (242) ELT 381 this Tribunal has held that the appellant cannot be given relief from penalty merely because he did not physically deal with the goods removed clandestinely, without payment of duties. Following the ratio laid down in the case of Dr. Writer Food Products (supra) I confirm the impugned order regarding the penalty against Shri K K Agarwal Director of NSPL. 4 Ex-facie, it would appear that the Tribunal has not dealt with the submissions which were urged and which were recorded in the earlier 4 cexa20.11.sxw ssm part of the decision. While confirming the penalty, the Tribunal seems to have proceeded on the basis that the only contention of the Appellant was that he had not dealt physically with the goods and hence, no penalty could be imposed under Rule 26 of the Central Excise Rules, 2002. Factually, this prima facie appears to be erroneous since the earlier part of the order of the Tribunal adverts to the other submissions which were urged. Since the Tribunal has inadvertently not considered the submissions which were urged on behalf of the Appellant, we consider it appropriate to remit the proceedings for a fresh hearing and decision. Accordingly, we allow the Appeal by setting aside the order of the Tribunal in so far as it pertains to the imposition of the penalty on the Appellant and restore the Appeal, to that extent for fresh determination. In the view which we have taken, it is not necessary to answer the questions of law as framed. The Petition is accordingly disposed of. There shall be no order as to costs. All the rights and contentions of the parties are kept open. (ANOOP V. MOHTA, J.) (DR. D.Y. CHANDRACHUD, J.)