2011 (2) TMI 876 - AT - Central Excise

Reduction in quantum of penalty - Clandestine removal - Shri Manish Kalyanji Shah was the working and active partner of the processing unit and was looking after the day to day work of the factory including the excise matters - The clandestine activities were being done with his consent and knowledge - As such the said appellant is liable to penalty in terms of the provisions of Rule 209A of Central Excise Rules, 1944/Rule 26 of Central Excise Rules, 2002 - However keeping in view, the fact that the duty was deposited by the processing unit immediately and keeping in view the quantum of duty evasion, reduce the penalty on Shri Manish Kalyanji Shah from Rs.1,00,000/- to Rs.50,000/- But for the reduction in quantum of penalty his appeal is otherwise rejected.

Summary

Issues:
1. Confirmation of demand of duty on M/s. Manish Processors for clandestine removal of processed fabrics.
2. Reduction of penalty imposed on M/s. Manish Processors.
3. Imposition of penalty on Shri Manish Kalyanji Shah, partner of the processing unit.

Analysis:

1. The judgment addresses the confirmation of demand of duty on M/s. Manish Processors for clandestine removal of processed fabrics. The appellant's advocate did not dispute the duty demand but challenged the order on the point of limitation. However, the issue of limitation was settled against them by a previous High Court judgment. Consequently, the confirmation of demand of duty, interest, and penalty on M/s. Manish Processors was upheld, and their appeal was rejected.

2. Regarding the penalty imposed on Shri Manish Kalyanji Shah, the judgment notes that he was an active partner of the processing unit involved in the clandestine activities with his consent and knowledge. The penalty was imposed based on the relevant provisions of the Central Excise Rules. Despite the duty being promptly deposited by the processing unit, the penalty on Shri Manish Kalyanji Shah was reduced from Rs.1,00,000/- to Rs.50,000/- due to the quantum of duty evasion. The appeal by Shri Manish Kalyanji Shah was rejected except for the reduction in the penalty amount.

3. In conclusion, both appeals were disposed of in the above manner, with the confirmation of duty demand on M/s. Manish Processors, the reduction of penalty on Shri Manish Kalyanji Shah, and the rejection of their appeals based on the circumstances and legal provisions outlined in the judgment.