Per Shri V.P. Gulati:

The issue in the appeal relates to levy of penalty of Rs. 1,00,000/- on the appellant. The charge against the appellant as set out in para 14 of the SCN is as under:-

14. Shri M. Hari Raju, Materials Manager of NCEL stated in the beginning of his statement dt. 24.8.92 (Annexure XI) that the material mentioned in selection reports of file R-31 (Sl.No. 6 of Annexure V) was only rough blocks but not polished granite slabs. But after being shown the register F-10 (Sl.No. 7 of Annexure V) accepted that polished granite slabs were sold in the DTA and he regretted for the mistake made in the earlier part of his statement. Shri M. Hari Raju has wilfully misdeclared the facts regarding the sale of polished granite slabs, in order to mislead the officers conducting the investigation. Shri M. Hari Raju also wrote in his own hand certain accounts relating to the sale of polished granite slabs in the DTA, in files/registers/R/31, R/32 & R/39, in the capacity of the finance Manager of NCEL. This clearly indicates that Shri Hari Raju had a clear knowledge of the sales of polished granite slabs into the DTA and is concerned in clearing the polished granite slabs in the DTA without payment of Central Excise duty in contravention of the provisions of Rules 9 (1), 100D, 100E, 100F & 226 of Central Excise Rules, 1944. Hence Shri M. Hari Raju appears to be liable to a penalty under Rule 209-A of Central Excise Rules, 1944.

2. The Ld. Lower authority while penalising the appellant has entered a common finding against the other persons who have been penalised and has held as under :-

16. From the private records and statements recorded from K. Ravinder Reddy, Managing Director; Shri Harvesh Marwah, Vice-president, Shri Hari Raju, Materials Manager; Shri S.M. Jain of M/s. Gulab Marble Suppliers and Shri Gopal Baldeva of M/s. Kohinoor Traders reveals that they were fully concerned with the clearance of polished granite slabs from M/s. NCEL without payment of duty and also found their involvement in clearance; transportation and receipt of sale proceeds of clandestine removals. Since their mens rea is proved, all the above parties are liable for personal penalty under rule 209A of the Central Excise Rules, 1944. M/s. NCEL are a registered limited company incorporated under Companies Act. Therefore, M/s. NCEL are a legal person in the eyes of law and they are also liable for penal action for contraventions of Central Excise provisions. It is found from records that M/s. NCEL have undoubtedly contravened the provisions of Rules 100B, 100D, 100E and 100F of the Central Excise Rules, 1944 in as much as they have not maintained daily stock account, cleared goods to DTA without payment of duty and without issuing of gate pass. Therefore, M/s. NCEL are liable for penalty under rule 209/226 of the Central Excise Rules, 1944.

3. The Ld. representative of the appellant has pleaded that the appellant has been penalised for the reason that he was concerned with the removal of the Polished granite slabs clandestinely, its transport and the receipt of the sale proceeds in regard to the same. The penalty is levied under rule 209A of the C.E. Rules. The Ld. representative has pleaded that section 209A, which we have reproduced below, can be invoked where the person who is concerned in any one of the activities i.e. 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 :-

RULE 1[209A. Penalty for certain offences. - 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 three times the value of such goods or five thousa