2013 (10) TMI 944 - AT - Central Excise

Clandestine removal - Confiscation of Goods Non-duty paid goods - penalty - pan masala / gutkha - Held that - The GRs covering the 182 bags bear the codes numbers mentioned above assigned to Pan King brand Gutkha by M/s Pawan Carriers - from the statements it is clear that 182 bags of Pan King brand Gutkha covered under the invoices of M/s Malhotra Trading Co. Delhi had actually been cleared by MRS/MRT Delhi without payment of duty and had been booked for transport with M/s Pawan Carriers and M/s Pawan Carriers as transporters had transported these non-duty paid goods knowing very well that the same are non-duty paid and hence are liable for confiscation - the duty demand on 182 bags of Gutkha seized from the three trucks parked and confiscation of the three trucks is upheld. Goods Cleared without Invoice Held that - All the GRs issued by M/s Pawan Carrier for transportation to Ahmedabad with M/s Malhotra Trading Co. Delhi consignor were in respect of consignments of Gutkha cleared from the factory of MRS/MRT at Samaypur Badli Delhi which had been brought to the office of M/s Pawan Carriers through Shri Than Singh - Since no Central Excise invoices has been issued in respect of these consignments of Gutkha and the total quantity of Gutkha has been transported under these GRs the duty has been correctly demanded in respect of the consignments. Caldestine Removal 0f Goods - Extended Period of Limitation Evasion of Duty Penalty u/s 11AC - Held that - The goods cleared clandestinely without payment of duty the extended period under proviso to Section 11A (1) has correctly been invoked in view of the fraud committed against Revenue with intent to evade the duty and penalty on MRS/MRT under Section 11AC of Central Excise Act 1944 for the period w.e.f. 28/9/96 and under Rule 173Q (1) (d) of the Central Excise Rules 1944 for period prior to 28/9/96 has been correctly imposed. Interest on Duty u/s 11AB - The Section had been inserted by Section 76 of Finance Act 1996 w.e.f. 28/9/96 interest on duty under this Section would be chargeable only in respect of clearances w.e.f. 28/9/96 and not in respect of clearances made during the period prior to 28/9/96. Penalty on Director under Rule 209A of the CE Rules Penalty on Partners - Held that - He would be liable for the penalty as he has knowingly dealt with the excisable goods which he knew or had reason to believe were liable for confiscation - The fact that in the GRs instead of writing actual description of the goods only the codes were being written also indicates that they were aware of the actual description of the goods thus M/s Pawan Carriers and its partners are involved in transportation of the excisable goods which they knew were liable for confiscation and therefore penalty on them has been correctly imposed under Rule 209A of Central Excise Rules 1944.

Issues Involved:
1. Non-payment of Central Excise duty by MRT/MRS on Gutkha.
2. Alleged clandestine clearance of Gutkha by MRT/MRS.
3. Receipt and use of unaccounted printed plastic laminate by MRT/MRS.
4. Transportation of non-duty paid Gutkha by M/s Pawan Carriers.
5. Confiscation of seized goods and trucks.
6. Imposition of penalties on MRT/MRS and associated individuals/entities.
7. Denial of natural justice due to non-supply of documents and denial of cross-examination.

Detailed Analysis:

1. Non-payment of Central Excise duty by MRT/MRS on Gutkha:
The Tribunal upheld the duty demands against MRT/MRS for the clandestine clearance of Gutkha without payment of duty. The demands were based on substantial evidence, including the seizure of Gutkha consignments and the recovery of printed plastic laminate used for packaging Gutkha. The Tribunal confirmed that MRT/MRS had received and utilized unaccounted plastic laminate for manufacturing Gutkha, which was then cleared without paying the requisite duty.

2. Alleged clandestine clearance of Gutkha by MRT/MRS:
The Tribunal found that MRT/MRS had cleared significant quantities of Gutkha clandestinely. This conclusion was supported by the recovery of goods, statements from various individuals, and documentary evidence. The Tribunal noted that the goods were transported under fictitious names and without proper invoices, further substantiating the allegations of clandestine clearance.

3. Receipt and use of unaccounted printed plastic laminate by MRT/MRS:
The Tribunal confirmed that MRT/MRS had received unaccounted printed plastic laminate from M/s Gupta Trading Co. and M/s Flex Industries Ltd. The evidence included statements from individuals involved in the transactions, invoices, and transport records. The Tribunal concluded that the unaccounted laminate was used for manufacturing Gutkha, which was then cleared without payment of duty.

4. Transportation of non-duty paid Gutkha by M/s Pawan Carriers:
The Tribunal upheld the findings that M/s Pawan Carriers had transported non-duty paid Gutkha on behalf of MRT/MRS. Statements from the transport company's employees and the recovery of goods supported this conclusion. The Tribunal noted that M/s Pawan Carriers was aware of the non-duty paid nature of the goods and had used codes to conceal the actual description of the consignments.

5. Confiscation of seized goods and trucks:
The Tribunal upheld the confiscation of the seized goods and trucks used for transporting non-duty paid Gutkha. The goods were found to be cleared without payment of duty, and the trucks were used in the transportation of these goods. The Tribunal confirmed the confiscation and the imposition of redemption fines on the trucks.

6. Imposition of penalties on MRT/MRS and associated individuals/entities:
The Tribunal upheld the imposition of penalties on MRT/MRS and associated individuals/entities under various provisions of the Central Excise Rules. The penalties were imposed for their involvement in the clandestine clearance of Gutkha and dealing with goods liable for confiscation. The Tribunal confirmed the penalties as justified based on the evidence and the nature of the violations.

7. Denial of natural justice due to non-supply of documents and denial of cross-examination:
The Tribunal addressed the appellants' contention regarding the denial of natural justice. It found that the issue of non-supply of documents was not raised during the proceedings before the Commissioner. The Tribunal also noted that cross-examination of key witnesses had been allowed and that the statements implicating MRT/MRS were corroborated by independent evidence. Therefore, the Tribunal concluded that there was no denial of natural justice.

Conclusion:
The Tribunal upheld the duty demands, confiscation of goods and trucks, and imposition of penalties on MRT/MRS and associated individuals/entities. The appeals were dismissed, except for the modification regarding the levy of interest under Section 11AB, which was limited to clearances made from 28/9/96 onwards. The Tribunal's decision was based on substantial evidence and adherence to legal principles.

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