1996 (12) TMI 279 - AT - Central Excise

Summary

Issues: Alleged evasion of Central Excise Duty, maintenance of private production records, fictitious supplier firms, duty demand, penalties imposed, authenticity of shift production register, liability of the appellant and individuals involved.

Analysis:
1. The appeal was filed against an order passed by the Commissioner of Central Excise and Customs, Aurangabad, alleging that the appellants were evading Central Excise Duty by clandestinely clearing Electric Wires and Cables without payment of duty, under the guise of trading activity. The investigation revealed discrepancies in production records and non-existent supplier firms, leading to duty demand and penalties on the firm and individuals. The appellants contested these allegations.

2. The appellant's consultant argued that the suppliers were not fictitious as claimed by the Department, emphasizing that payments were made through account payee cheques, and transport and invoicing were legitimate. The consultant also questioned the reliability of the shift production register, stating it was for dispatch purposes only. Additionally, the consultant challenged the legality of imposing personal penalties on the proprietor and the firm.

3. The Department contended that the appellant misrepresented actual production as trading activity to evade duty, citing discrepancies between the shift register and statutory RG-1 Register. The Department highlighted the duty payment procedures under Rule 173H, which the appellants allegedly failed to follow. The consultant rebutted, stating that the wires and cables from other factories were received at a different facility, not the appellant's factory.

4. The Tribunal upheld the duty demand based on the shift register entries and investigations revealing non-existent supplier firms. The Tribunal found the appellant's explanation regarding the purpose of the register unconvincing. However, the penalties imposed on the firm and the proprietor were deemed excessive and reduced from Rs. 1,00,000 to Rs. 50,000 each. The penalties on the firm were set aside, while reduced penalties were upheld for the proprietor and the incharge. The appeal was disposed of accordingly for all parties involved.