2000 (11) TMI 1158 - AT - Central Excise

Summary

Issues Involved:

1. Duty demand of Rs. 4,84,948.80 P.
2. Duty demand of Rs. 2,14,478.88 P.
3. Imposition of penalty on appellant No. 1.
4. Imposition of penalty on appellant No. 2.

Issue-wise Detailed Analysis:

1. Duty demand of Rs. 4,84,948.80 P:

The discrepancy in dates and quantities between the GRs (Goods Receipts) and invoices was highlighted. For instance, in Sl. Nos. 1 and 2, the date of invoice and date of GR did not tally. In Sl. Nos. 3, 4, and 5, there were discrepancies in both dates and quantities. The appellants attempted to correlate the GRs and invoices by explaining that GRs were obtained in advance and that the goods covered by the corresponding invoices were partly transported through M/s. Agra Rajasthan Transport Corp. and other transporters. However, this correlation was not accepted because Shri Akhilesh Shukla, the Transport Agent, initially stated that no advance GRs were issued and GRs were issued when goods were loaded onto the truck before their removal. Although he later stated that advance GRs were prepared for M/s. Naveen Textile Agencies, no valid reason was given for deviating from the normal practice. The appellant No. 1 also failed to establish that other transporters followed the procedure of issuing advance GRs. Additionally, the appellant could not show the corresponding duty-paying invoice for GR No. 653, dated 22-1-1998. Therefore, the contention of appellant No. 1 was not tenable, and the Department successfully proved the clandestine removal of goods under the above GRs. Hence, the duty demand of Rs. 4,84,948.80 P was upheld.

2. Duty demand of Rs. 2,14,478.88 P:

This demand was based on entries dated 24-3-1998 and 27-4-1998 in a notebook recovered from the gatekeeper of appellant No. 1's factory. The entry on 24-3-1998 showed the removal of 48 tent bundles and 3 tents, which was not covered by Invoice No. 122, dated 23-3-1998, as it showed clearance of 80 tents, 40 walls, and 48 poles. Similarly, the entry dated 27-3-1998 showed the removal of 180 tent bundles, 12 bamboo bundles, 60 kanat bamboos, and 5 other bundles, which could not be correlated with Invoice Nos. 126 and 127 produced by the appellants. Therefore, the finding of clandestine removal of goods involving the above-mentioned duty was also upheld.

3. Imposition of penalty on appellant No. 1:

The penalty on appellant No. 1 was warranted for contravention of the Rules. However, considering the totality of the facts and circumstances, including the fact that the goods in question were supplied to para-military forces, the penalty on appellant No. 1 was reduced to Rs. 2.5 lakhs.

4. Imposition of penalty on appellant No. 2:

The penalty on appellant No. 2, who is the proprietor of appellant No. 1, was set aside as, in the eye of law, a proprietorship concern and its proprietor are one and the same and do not have separate legal identities.

Conclusion:

The duty demand of Rs. 10,80,914.36 P was upheld. The penalty on appellant No. 1 was reduced to Rs. 2.5 lakhs. The penalty on appellant No. 2 was set aside. Appeal No. E/1680/2000-NB was partly allowed, and Appeal No. E/1681/2000-NB was allowed.