Prashant Rajnikant Mehta Vs Commissioner of Central Excise (CESTAT Mumbai)
Demand under Section 11A not sustainable against non-chargeable persons; penalty under Rule 209A not leviable absent confiscation
The appellants are individuals. Barnala International is an exporter. Ranjeet Choudhary was the proprietor. It exported goods under claim for drawback. It was held that drawback was allegedly fraudulently claimed as goods were not exported. Accordingly; a demand of drawback over Rs. 20 crores along with interest and penalty was confirmed against the appellants on the ground that they were the “master mind” and “ultimate beneficiaries” of the drawback. No penalty was imposed on Barnala International. The appellants and revenue filed appeals.
Hon’ble CESTAT, Mumbai set aside the order and allowed the appeals of the appellants and dismissed the appeal filed by the Department. It held: (i) Section 11A of the Central Excise provides for demand of duty from the “person chargeable” with duty; that is the exporter who was sanctioned refund; (ii) the Tribunal; in the earlier round; had held that demand can be made against Barnala International only; (iii) Rule 209 and Rule 209A provide for penalty only in case of confiscation of goods; there was no proposal for confiscation; nor any such finding; hence; no penalty can be imposed on the appellants or Barnala International.
