2007 (4) TMI 408 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case include the demand of duty based on parallel invoices, physical verification leading to detection of shortage of inputs, seizure of goods from other premises, imposition of penalties, and the admissibility of statements recorded by Central Excise officers.

Demand of Duty based on Parallel Invoices:
The appellant company, engaged in manufacturing medicines, faced allegations of clearing goods without payment of duty under parallel invoices. Statements from company officials implicated them in the clearance of goods based on these invoices. The appellant contested the demand of duty, citing lack of evidence of clandestine removal and alleging that statements were obtained under duress. However, the Tribunal found that the company had accepted the existence of parallel invoices and paid duty on them, with no refund claim filed. The Tribunal upheld the demand of duty and penalties based on the statements provided by the company officials.

Detection of Shortage of Inputs and Seizure of Goods:
During physical verification, officers detected a shortage of inputs and seized goods from premises other than the factory. Company officials admitted that the detained goods were purchased from the company's sale depot. The adjudicating authority confirmed the duty demand, interest, penalties, and confiscation of seized goods. The Tribunal upheld these decisions, emphasizing the company's admission and the lack of evidence to support the appellant's contentions regarding the seized goods and shortage of inputs.

Imposition of Penalties:
Penalties were imposed on various individuals associated with the appellant company. The Tribunal set aside the penalty on the Store Keeper, recognizing his role as an employee acting under instructions. Penalties on the Managing Director and another Director were also revoked due to insufficient evidence. However, the penalty on a Director who admitted to the parallel invoices was upheld.

Admissibility of Statements and Final Decision:
The Tribunal considered the admissibility of statements recorded by Central Excise officers under Section 108 of the Customs Act. It concluded that the statements were valid evidence, supporting the demand of duty based on parallel invoices. Ultimately, the Tribunal upheld the decision against the appellant company and certain individuals, while allowing relief for others based on their roles and admissions in the case.