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2002 (2) TMI 697 - AT - Central Excise

Issues: Duty demand confirmation, personal penalties imposition, violation of rules and natural justice, evidence of clandestine removal, legal infirmity in the impugned order, parallel sets of GPIs/Invoices, evasion of duty, penalty under Section 11AC, personal penalties on individual appellants.

Duty Demand Confirmation:
The judgment pertains to appeals against an order confirming duty demand and imposing penalties on the appellants. The Commissioner confirmed a duty demand of Rs. 63,50,509 against the appellants for clandestine removal of goods without payment of duty. The investigation revealed the use of two sets of GPIs/Invoices, with one set used for removing goods on full duty payment. The appellants supplied goods to entities like Railways, DGS&D, and DOT without disclosing full duty payment details.

Violation of Rules and Natural Justice:
The appellants contended that they were not provided complete documents to defend their case, and the Panchnama was vague and attested by illiterate persons. However, the Tribunal directed the Department to allow inspection of documents before the Commissioner passed the impugned order. The appellants were afforded ample opportunity to defend their case, inspect records, and participate in a personal hearing, ensuring no violation of natural justice rules.

Evidence of Clandestine Removal:
The judgment discusses the evidence supporting the clandestine removal of goods by the appellants. The Commissioner found that the appellants maintained parallel sets of GPIs/Invoices, with admissions from partners confirming this practice. The appellants collected duty from buyers but did not disclose it to the authorities. Various corroborative pieces of evidence, including bank transactions and inspection reports, supported the findings of clandestine removal.

Legal Infirmity in the Impugned Order:
The judgment concludes that the impugned order did not suffer from any legal infirmity. The Commissioner's decision was based on substantial evidence, including admissions from the appellants and corroborative documents. Detailed reasons were provided for confirming the duty demand, and the findings were upheld by the Tribunal.

Penalty Under Section 11AC:
The judgment addresses the imposition of penalties under Section 11AC. While confirming the duty demand, the penalty equal to the duty amount imposed by the Commissioner was set aside. The Tribunal ruled that this penalty provision could not be applied retrospectively, leading to the penalty's cancellation.

Personal Penalties on Individual Appellants:
Regarding personal penalties, the judgment differentiated between appellants based on their involvement and roles. The penalty on a sleeping partner not involved in day-to-day affairs was set aside. For other appellants, the penalty amounts were reduced based on the circumstances. The judgment modified the impugned order, confirming the duty amount, setting aside the Section 11AC penalty, and adjusting personal penalties accordingly for each appellant.

 

 

 

 

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