2011 (2) TMI 720 - AT - Central Excise

Clandestine removal - Penalty has been imposed on two directors of the manufacturing unit in terms of Rule 209A of Central Excise Rules, 1944 - goods cleared under delivery challans were without making entries in the records and without payment of Central Excise duty - clandestine removal stand confirmed against the appellant based upon the recovery of 5 private registers, duplicate set daily report of production & raw material and delivery challans - Held that where no option is given by the lower authorities to deposit the entire dues along with 25% of the penalty in terms of proviso to Section 11AC, such option can be given by the Tribunal.- while upholding the imposition of penalty to the extent of 100% of duty, gives an option to him to pay the entire dues along with 25% of the penalty within 30 days from the date of the, in which case the penalty shall stand reduced to 25%.

Summary

Issues:
Clandestine removal of goods without payment of duty, confirmation of duty, imposition of penalty, liability of directors under Rule 209A of Central Excise Rules, 1944.

Analysis:
The case involved the confirmation of duty against a company engaged in the manufacture of Paper Tubes, along with penalties imposed on the directors for clandestine removal of goods without payment of duty. Central Excise officers conducted checks and recovered private registers, daily production reports, and delivery challans indicating discrepancies in entries compared to statutory records. The company's supervisor and directors admitted to clandestine removal, with statements corroborating the modus operandi and involvement of the directors. The Tribunal upheld the duty confirmation and penalty based on corroborative evidence and statements, in line with legal precedents like the case of M/s Dharmendra Textile Processors. The Tribunal also provided an option to reduce the penalty by paying dues within a specified timeframe, following the decision in the case of M/s Swati Chemicals & others. The penalties imposed on the directors under Rule 209A of Central Excise Rules, 1944 were upheld due to their involvement as per their statements. The appeals were rejected, concluding the case in accordance with the findings.

This detailed analysis of the judgment highlights the key aspects of the case, including the evidence, admissions, legal precedents, and the Tribunal's decision on duty confirmation, penalties, and directorial liability under Rule 209A.