R.K. Agarwal Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. this stay application is directed against the imposition of penalty of rs. 1,00,000/- (one lakh only) on the appellant. since the issue involved in this case is in a narrow compass, i dispense with the requirement of the pre-deposit of the stay and take up the appeal for disposal with consent of both sides.2. considered the submissions made by both sides and perused records. i find that the penalty has been imposed on the appellant who is the managing director of the company m/s. kalinga paints and chemicals industries (p) limited. the adjudicating authority vide his order-in-original dated 31-12-2003 came to conclusion that the company m/s. kalinga paints and chemicals (p) ltd. has violated the provisions of the central excise rules by clearing the goods clandestinely. he confirmed.....

Judgment:
1. This Stay Application is directed against the imposition of penalty of Rs. 1,00,000/- (One lakh only) on the appellant. Since the issue involved in this case is in a narrow compass, I dispense with the requirement of the pre-deposit of the stay and take up the appeal for disposal with consent of both sides.

2. Considered the submissions made by both sides and perused records. I find that the penalty has been imposed on the appellant who is the Managing Director of the Company M/s. Kalinga Paints and Chemicals Industries (P) Limited. The adjudicating authority vide his order-in-original dated 31-12-2003 came to conclusion that the Company M/s. Kalinga Paints and Chemicals (P) Ltd. has violated the provisions of the Central Excise Rules by clearing the goods clandestinely. He confirmed the demand and imposed equivalent of penalty on the Company and also imposed a penalty of Rs. 1, 00,000/- (One lakh only) on the Managing Director under Rule 209A of Central Excise Rules, 1944. The company preferred an appeal to the Commissioner (Appeals) under Section 35. The current appellant before me did not prefer any appeal before the Commissioner (Appeals).

3. An argument was taken before the Commissioner (Appeals) that the appeal filed by the Company would also cover the appeal to be filed by the Managing Director of the Company. The Commissioner (Appeals) in his order-in-appeal has held that: In so far as imposition of penalty of Rs. 1 lakh on Sri R.K. Agarwal under Rule 209A is concerned, I find that the appellant company is a juristic person and they can not take up the cause of personal penalty imposed under Rule 209A on the M.D in his personal capacity, and, therefore, their plea in this regard.

4. It is seen from the above that the Commissioner (Appeals) has correctly culled out the law in this case under the Companies' Act i.e.

Private Limited Company, is an independent person and the Managing Director is only an employee and he can not be identified with the Company but should be considered as an individual.

5. Further, the provisions of Section 35(1) provides for appeal to be filed by person aggrieved by any decision or Order passed under Central Excise Act, 1944 by the Central Excise officer. The appellant before me was definitely an aggrieved person by the Order passed by the adjudicating authority. He preferred not to file an appeal under Section 35 to the first appellate authority. In the absence of any appeal before the first appellate authority, the appellate authority has dismissed the contention raised during the hearing of the appeal of the Company before him and came to conclusion that no appeal has been filed by the appellant.

6. Since the appellant have not preferred any appeal to the appellate authority and the appellate authority has not considered the contention raised in the appeal of the Company, the current appeal before me is not maintainable and is dismissed. The Stay application is also dismissed.