2006 (6) TMI 453 - AT - Central Excise

Summary

Issues:
- Appeal against order-in-appeal passed by Commissioner (Appeals)
- Allegations of clearing excisable goods without payment of duty
- Imposition of penalties under various sections of Central Excise Act and Rules
- Contention regarding lack of evidence for goods being cleared without payment of duty
- Challenge to penalties imposed on the appellant and the Director
- Interpretation of Rule 173Q and Rule 209A in relation to penalties

Analysis:
The appellant filed an appeal against the order-in-appeal passed by the Commissioner (Appeals) regarding allegations of clearing excisable goods without payment of duty. The Revenue officers found that the appellant was clearing goods without duty payment by maintaining parallel invoices, leading to the imposition of a duty demand, penalties under Rule 173Q and Section 11AC of Central Excise Act, and a penalty on the Director under Rule 209A. The appellant contended that there was no concrete evidence of goods being cleared without duty payment, as the photocopies of invoices forming the basis of the demand were not recovered, and the source of these invoices was not disclosed. Additionally, the appellant denied the signatures on these invoices, challenging the sustainability of the demand.

Regarding penalties, the appellant argued that Rule 173Q was invoked without specifying the particular clause allegedly contravened, citing a Supreme Court decision to support their stance. They also contested the penalty on the Director, claiming no finding of intent to evade duty payment. In contrast, the Revenue maintained that the invoices signed by the appellant's authorized signatory indicated clearance without duty payment, supported by investigations into transportation and the Director's involvement in day-to-day affairs. The Tribunal upheld the duty demand, citing the presence of photocopies of invoices and lack of corresponding entries in statutory records as evidence of goods being cleared without payment.

The Tribunal set aside the penalty under Rule 173Q due to lack of specificity in the contravention clause, following the Supreme Court's precedent. However, the penalty under Section 11AC was upheld as the appellant cleared goods without duty payment. The penalty on the Director was reduced considering the case's circumstances. Ultimately, the Tribunal upheld the order, emphasizing the lack of recovered invoices and discrepancies in statutory records as key factors in confirming the duty demand and penalties.