2007 (1) TMI 358 - AT - Central Excise

Summary

Issues Involved:
1. Imposition of penalty on Shri Subhash Gupta.
2. Imposition of penalty on Shri Mandala Janakiram.

Summary:

Issue 1: Imposition of penalty on Shri Subhash Gupta

Both appellants challenged the imposition of penalties u/s Rule 209A of CE Rules 1944. The Commissioner had previously not discussed the role of the appellants in evasion of duty, leading to a remand by the Chennai Bench to reassess the evidence. The Commissioner found that Shri Subhash Gupta, as a whole-time Director, played an active role in the misuse of Modvat credit and evasion of duty. Evidence included statements and documents showing his involvement in financial transactions and company operations. The Commissioner imposed a penalty of Rs. 20,00,000/- on Shri Subhash Gupta. However, considering his current indigent status, the Tribunal reduced the penalty to Rs. 1,00,000/-.

Issue 2: Imposition of penalty on Shri Mandala Janakiram

The Commissioner found that Shri Mandala Janakiram, though the Managing Director, was not involved in the day-to-day operations and was a namesake MD. Despite this, the Commissioner imposed a penalty of Rs. 2,00,000/- on him. The Tribunal noted the contradictory findings of the Commissioner, highlighting that Shri Mandala Janakiram was not proven to have knowledge of the evasion of duty. Consequently, the penalty imposed on Shri Mandala Janakiram was set aside, and his appeal was allowed.

Conclusion:

The Tribunal modified the impugned order by reducing the penalty on Shri Subhash Gupta to Rs. 1,00,000/- and setting aside the penalty on Shri Mandala Janakiram.

(Pronounced and dictated in open court)