2005 (5) TMI 497 - AT - Central Excise

Summary

Issues:
1. Allegation of gross undervaluation of goods by the appellant.
2. Determination of whether two companies are related persons under the Central Excise Act, 1944.
3. Assessment of short payment of duty by the Department.
4. Appellant's reliance on various decisions and Commissioner's findings.
5. Liability of the appellant, Shri V. Sunder Raj, for aiding and abetting the evasion of Central Excise duty.

Issue 1: Allegation of gross undervaluation of goods by the appellant:
The main issue in this case was the allegation of gross undervaluation by the appellant while clearing goods between two companies without filing the price declaration under Rule 173-C(1) of the Central Excise Rules, 1944. The Department contended that the appellant had undervalued goods, leading to potential duty evasion.

Issue 2: Determination of whether two companies are related persons:
The central issue revolved around whether M/s. Tekson Ltd. and M/s. Teksons Cooling Systems Pvt. Ltd. were related persons as per Section 4(4)(c) of the Central Excise Act, 1944. The relationship between the two companies was crucial in determining the duty liability under the Act.

Issue 3: Assessment of short payment of duty by the Department:
The Department calculated the short payment of duty based on the relationship between the two companies and relevant provisions of the Central Excise Act, 1944. The assessment was made following Board Circular No. 257/91/1996-CX.

Issue 4: Appellant's reliance on various decisions and Commissioner's findings:
The appellant relied on various decisions to support their case, including Atic Industries, Dawn Apparels Ltd., and International Computer India Manufacturing Company Ltd. However, the Commissioner distinguished these decisions and found the appellant in contravention of the Act and Rules, leading to the imposition of duty and penalties.

Issue 5: Liability of the appellant, Shri V. Sunder Raj, for aiding and abetting duty evasion:
The appellant, Shri V. Sunder Raj, was found responsible for aiding and abetting the evasion of Central Excise duty by handling excise matters for the company. The Commissioner held him accountable for the undervaluation with the consent and knowledge of the Director, leading to the imposition of penalties under Rule 209A of the Central Excise Rules, 1944.

In conclusion, the judgment addressed multiple issues, including the determination of related persons under the Central Excise Act, assessment of duty evasion, appellant's reliance on legal precedents, and the liability of an individual for aiding in duty evasion. The decision upheld the Commissioner's findings, imposing penalties on the appellant for their involvement in the undervaluation of goods and evasion of Central Excise duty.