Nusli Davar Vs. Commissioner of Central Excise

1. Shri M.V. Raveendran, ld. Advocate appearing for the appellants submits that the adjudicating authority has imposed a penalty of Rs. 20 crores on the appellant. His submission is that there is no allegation in the Show Cause Notice that the appellant has in any manner dealt with the goods in question. The order of the adjudicating authority is based on the presumption. He also submitted that the appellant is not in any way benefited personally particularly when the goods are lying in the custody of official liquidator. His contention is that after reading Para 23 of the impugned order it appears that the adjudicating authority has totally gone by the consideration that the liquidation proceedings have started against the company while imposing such high penalty on the appellant. He also contended that there is no conscious non-observation of the law by the appellant in discharge of export obligation. In this regard he drew our attention to page 66 of the Order-in-Original wherein it is stated that the export obligations to the extent of Rs. 46.73 crores have been fulfilled by the company. He also submitted that in view of the decisions in the case of Akbar Badruddin Jiwani v. Commissioner of Customs, Calcutta -1990 (47) E.L.T.161 (S.C.) particularly Para 58 thereof, such a penalty is not imposable on the appellant. He also relied on the decision in the cases of Extrusion v. Commissioner of Customs -1994 (70) E.L.T. 52 (Tri. - Cal.) and Z.U. Alvi v. CCE -2000 (117) E.L.T. 69 (Tri.). His submission is that the legal position enunciated in the above said case laws is fully applicable to this case, therefore, the penalty is not imposable on the appellant. So far as the case laws relating to 1983 (13) E.L.T.(sic) and 1989 (42) E.L.T. 350 (S.C.) relied upon by the Revenue, he submitted that the first case relates to the smuggled goods and the later case relates to nonfiling of Income Tax return in time.

Therefore, his contention is that these cases are distinguishable and they are not applicable to the facts of the present case.

2. Shri A.K. Saxena, learned DR appearing on behalf of the Revenue contended that the appellant is liable for penalty under Section 112(a) of Customs Act, 1962 and Rule 209A of the Central Excise Rules, 1944.

In this regard he relied on the decisions of the Supreme Court as mentioned above.

3. After hearing both sides and perusal of the records, we find that the impugned order in no way attributes that the appellant was personally looking after the affairs of the Company. Besides, we also do not find any personal gain having been availed by him. Moreover, since the company has gone into liquidation, the department has already filed claim for the duty and penalty in the liquidation proceedings. We are therefore, of the view that the applicant has been able to make out a strong case in his favour for waiver of pre-deposit the penalty. We accordingly dispense with the requirement of pre-deposit of penalty amount and stay recovery thereof during the pendency of the appeal. The matter to come for regular hearing on 19-5-2003.