2002 (10) TMI 673 - AT - Central Excise

Summary

Issues Involved:
1. Clandestine removal of goods without payment of duty.
2. Maintenance of duplicate invoices.
3. Invocation of extended period of demand under Section 11A(1) of the Central Excise Act, 1944.
4. Imposition of penalty under Section 11AC and Rule 173Q of the Central Excise Rules, 1944.
5. Imposition of penalty on company officers under Rule 209A of the Central Excise Rules, 1944.
6. Payment of interest under Section 11AB.

Issue-wise Detailed Analysis:

1. Clandestine Removal of Goods Without Payment of Duty:
The appellants, M/s. Rajasthan Explosives & Chemicals Ltd. (RECL), were found to have cleared 10,927.25 MTs of explosives valued at Rs. 16,75,44,038/- without paying duty amounting to Rs. 3,21,30,295/-. The goods were sent to various collieries of M/s. Coal India Ltd. (CIL). The company had received full payment, including central excise duty, but did not deposit the duty with the central excise department. The Commissioner confirmed the clandestine removal of goods based on the evidence of duplicate invoices, transport documents, and statements from company officials.

2. Maintenance of Duplicate Invoices:
RECL maintained more than one set of invoices with identical serial numbers. One set was declared to the central excise department, while the other was used for clearing goods without paying duty. Statements from company officials, including the Manager (Finance) and Manager (Distribution & Excise), confirmed the practice of using parallel invoices for clearance of goods.

3. Invocation of Extended Period of Demand Under Section 11A(1) of the Central Excise Act, 1944:
The show cause notice alleged that RECL had resorted to clandestine removal of goods using parallel invoices. The Commissioner invoked the extended period of demand under Section 11A(1) due to the deliberate evasion of duty. The appellants did not contest the submission of central excise invoices and transport documents to the bank, which were represented as genuine but did not reflect duty payment.

4. Imposition of Penalty Under Section 11AC and Rule 173Q of the Central Excise Rules, 1944:
The Commissioner imposed a penalty of Rs. 3,21,30,295/- on RECL under Section 11AC and an additional penalty of Rs. 10 lakhs under Rule 173Q. The Tribunal upheld the demand for duty but reduced the penalty under Section 11AC to Rs. 1 crore, while maintaining the penalty under Rule 173Q.

5. Imposition of Penalty on Company Officers Under Rule 209A of the Central Excise Rules, 1944:
Penalties were imposed on several officers of the company, including the Managing Director, Vice Presidents, and Manager (Finance). The Tribunal upheld the penalties but reduced the amounts for the Vice Presidents to Rs. 1.5 lakhs each. The Tribunal rejected the appellants' contention that Rule 209A should not apply to company officers, distinguishing the present case from cited precedents.

6. Payment of Interest Under Section 11AB:
The Commissioner directed that RECL should pay interest as per Section 11AB. The Tribunal upheld this directive, emphasizing that the clandestine removal of goods and non-payment of duty justified the imposition of interest.

Conclusion:
The Tribunal upheld the demand for central excise duty and the imposition of penalties, with some reductions. The evidence of duplicate invoices, transport documents, and statements from company officials substantiated the clandestine removal of goods without payment of duty. The invocation of the extended period of demand and the imposition of penalties under relevant sections and rules were deemed appropriate. The appeals were dismissed with minor relief in penalty amounts for certain officers.