ORDER
Jyoti Balasundaram, Member (J)
1.The applications for waiver of pre-deposit of penalty of Rs. 97,373/- imposed upon the rolling mills and Rs. 10,000/- each imposed upon the partner and the manager of the mills arise out of the order of the Commissioner (Appeals).
2. It is the submission of the learned counsel for the applicants that the entire duty amount was paid during investigation and further the adjudicating authority whose order has been upheld by the lower appellate authority, had imposed consolidated penalties under Rule 173Q read with Section 11AC which is not permissible in law and which has been found to be unacceptable in the earlier orders of the Tribunal. As regards the partner of the manufacturer it is his submission that since the case of the departments of shortage/non-receipt of about 64 MT. of inputs the provisions of Rule 209A are not attracted as this rule prima facie requires physically dealing with the goods. He relied upon the orders of the Tribunal which has taken a prima facie view that physically dealing with the goods is required for attracting the provisions of Rule 209A of the Central Excise Rules.
3. Prayer for waiver is opposed by the learned SDR who submits that the rolling mills are liable to penalty and further he submits that physically dealing with the goods is not required having regard to the language of Rule 209A and therefore penalty on the partner and also upon the manager of the manufacturer is sustainable.
4. I have carefully considered the rival submissions and find prima facie force in the applicants’ submission regarding non-sustainability of consolidated penalty and therefore waive pre-deposit of the penalty imposed upon the mills and stay recovery thereof pending the appeal. As regards the remaining two applicants I also see prima facie force in the applicants submission that in order to attract the provisions of Rule 209A the partner should have knowledge or reason to believe that the goods that he has dealt with are liable to confiscation. Since prima facie the partner and the manager did not physically deal with the goods as the case of the department is that of non-receipt of certain quantity of inputs I hold that a strong prima facie case for waiver has been made and hence waive the requirement of pre-deposit of the penalty by the partner and the manager.
5. In the result pre-deposit of the penalties imposed on all the applicants are waived and recovery stayed pending these appeals.
6. The applications are hereby allowed.