Personal penalty cannot be imposed on the Chairman of the Company for failure in ensuring proper accounting of the goods

Last updated: 02 July 2022

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The CESTAT, Ahmedabad has ruled that a substantial personal penalty cannot be levied on a company Chairman who is not directly responsible for managing the accounts of manufactured goods. While the Chairman was found to have failed in ensuring proper accounting of finished goods, the tribunal found no evidence of clandestine removal. Consequently, the penalty was reduced from INR 5 Lakhs to INR 1 Lakh.

Court :
CESTAT, Ahmedabad

Brief :
The CESTAT, Ahmedabad in Mr. Anil Dudalal Kaneria v. C.C.E.-Bharuch [Excise Appeal No.10079 of 2019] has held that a huge personal penalty cannot be imposed on the Chairman of the Company who is not looking after the accounts of the goods manufactured. Further, reduced the penalty of INR from 5 Lacs to INR 1 Lacs for failure in ensuring proper accounting of the finished goods.

Citation :
Excise Appeal No.10079 of 2019

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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