2003 (7) TMI 544 - AT - Central Excise

Summary

Issues:
1. Liability to duty on woven sacks of polyethylene manufactured and cleared without payment of duty.
2. Imposition of penalties on the appellant and individuals involved.
3. Allegations of evasion of duty and deliberate actions.
4. Request for leniency in penalties due to duty payment.
5. Involvement of individuals in evasion of duty.
6. Consideration of penalties based on total quantum of duty evaded.

Analysis:
1. The Commissioner confirmed the liability to duty on woven sacks of polyethylene manufactured and cleared without payment of duty by the company. Penalties were imposed on the company, its Director, and its Excise Clerk. The appeals were limited to the penalties imposed, with the duty on the goods being paid shortly after the investigation began, not challenging the liability to duty.

2. The counsel for the appellants argued that the failure to pay duty was a genuine mistake and that penalties should not be imposed when duty had been paid before the notice. The departmental representative emphasized deliberate evasion of duty by clearing goods on unauthorized invoices without paying the duty due.

3. The Tribunal considered the request for leniency in deserving cases where the assessee voluntarily admits to not paying duty before detection by the department. However, the Tribunal rejected the notion that admitting guilt after detection should absolve one from penalties, as it could lead to a dangerous precedent of avoiding punishment by confessing after the fact.

4. The involvement of the Director and the Excise Clerk in the evasion of duty was established through statements and actions. The Director's role in instructing the Excise Clerk to issue invoices for trading goods without proper authorization was highlighted, leading to penalties being upheld against the Director but not the Excise Clerk, who was deemed to have been misled.

5. The penalties imposed on the Director and the company were reduced considering the duty amount involved and other circumstances. The penalty on the Director was reduced from Rs. 10 lakhs to Rs. 3 lakhs, on the company from Rs. 20 lakhs to Rs. 10 lakhs, and the fine for redemption of plant and machinery from Rs. 10 lakhs to Rs. 2 lakhs, based on the total quantum of duty evaded.

This detailed analysis of the judgment highlights the issues of duty liability, penalties imposition, deliberate evasion, involvement of individuals, and the considerations for penalty reduction based on the duty evaded.