2013 (7) TMI 792 - AT - Central Excise

Clandestine Removal - 42.030 M.T. of MS Ingots seized from truck No. UP 2 IN 3681, from place near Varanasi and in respect of which an invoice issued by M/s Panther Ispat Udyog, Bokaro to M/s Manoj Steels had been produced, had been manufactured and cleared by M/s Savitri Ispat (India) Pvt. Ltd., Durgapur Statement of Mohd. Akram, driver of the said Truck is his spontaneous statement and the person giving the statement being a simple illiterate person could have no reason to give a false statement. I also find that the invoice issued by M/s Panther Ispat Udyog, Bokaro had been produced by the truck driver and on inquiry with Shri Ajay Kumar Garg of M/s Panther Ispat Udyog, Shri Garg also has named M/s Savitri Ispat as the supplier of the goods and had stated that the goods had been cleared without payment of duty. This statement of Shri Ajay Kumar Garg has also not been retracted - Evidence is sufficient to establish the preponderance of probability in support of the obligation that goods, in question, had been manufactured by M/s Savitri Ispat (India) Pvt. Ltd. and had been illicitly cleared by them Decided against the Assessee. Penalty under Rule 26 of the Central Excise Rules, 2002 - Imposition of penalty on Shri Ramjatan Prasad Singh, Manager of M/s Savitri Ispat India Ltd. Penalty under said rule on the basis of allegation that he knowingly, dealt with the goods which he knew are liable for confiscation Held that - There is no evidence to show that it is Shri Ramjatan Prasad Singh, who was involved in illicit for the clearance of the goods, in question. It is very much possible that some other employee of M/s Savitri Ispat may be involved Decided in favor of Appellant(Shri Ramjatan Prasad Singh).

Summary

Issues:
1. Whether the goods seized from the truck were manufactured and cleared by M/s Savitri Ispat (India) Pvt. Ltd.
2. Validity of penalties imposed on M/s Savitri Ispat (India) Pvt. Ltd. and Shri Ramjatan Prasad Singh.

Analysis:

Issue 1:
The central issue in this case pertains to the origin of the goods seized from the truck, specifically whether they were manufactured and cleared by M/s Savitri Ispat (India) Pvt. Ltd. The department's case relies on the statements of the truck driver, Mohd. Akram, and Shri Ajay Kumar Garg of M/s Panther Ispat Udyog. Despite the truck owner, Shri Talib Hussain, claiming the goods were loaded from a non-existent factory, the statements of Akram and Garg indicate the involvement of M/s Savitri Ispat. The tribunal found Akram's statement to be spontaneous and credible, supported by Garg's uncontradicted assertion that the goods were procured from M/s Savitri Ispat. Consequently, the tribunal upheld the penalty on M/s Savitri Ispat (India) Pvt. Ltd., concluding that the evidence established the illicit clearance by the said company.

Issue 2:
Regarding the penalty imposed on Shri Ramjatan Prasad Singh, the Manager of M/s Savitri Ispat India Ltd., it was alleged that he knowingly dealt with goods liable for confiscation. However, the tribunal noted a lack of evidence directly implicating Singh in the illicit clearance. Given the possibility of another employee's involvement, the tribunal deemed the penalty under Rule 26 unjustified and unsustainable. As a result, the appeal of Shri Ramjatan Prasad Singh succeeded, while the appeal of M/s Savitri Ispat (India) Pvt. Ltd. was dismissed.

In conclusion, the tribunal upheld the penalty on M/s Savitri Ispat (India) Pvt. Ltd. for the illicit clearance of goods but deemed the penalty on Shri Ramjatan Prasad Singh unjustified due to insufficient evidence of his direct involvement.