2014 (2) TMI 963 - AT - Central Excise

Imposition of penalty - penalty on signatory - Appeal dismissed for non-compliance to the stay order - Held that - Appellant was dealt with as authorised signatory in Para 1.5 thereof. The allegation therein shows that there was failure to make entry of certain transactions by this appellant. That adjudication order does not show role of the present appellant causing prejudice to revenue. Learned Adjudicating Authority simply basing on an affidavit held that the appellant had a criminal intention. Unless cogent evidence is brought to record to say that retraction in affidavit is untruthful and the appellant was instrumental to create fake documents, role of the appellant cannot be appreciated. For lack of examination and corroborative evidence proving the retraction was under influence, but there were fake documents proposition of penalty of Rs. 60,000/- on the appellant is not possible to be sustained - Decided in favour of assessee.

Summary

Issues:
1. Identification of the correct appellant challenging the penalty.
2. Dismissal of Appeal No. E/612/2005 for non-compliance with the stay order.
3. Allegations against the present appellant as an authorized signatory for failure to make certain transactions.
4. Evaluation of the evidence and affidavit regarding the appellant's criminal intention.
5. Assessment of the role of the appellant in creating fake documents and imposition of penalty.

Analysis:
1. The judgment clarifies the correct appellant challenging the penalty as Shri Parmod Kumar, despite the initial confusion with the cause title mentioning M/s. G. Tex Dyeing & Printing Mills Ltd. The verification by Shri Parmod Kumar establishes his standing as the actual appellant, leading to the correction in the cause title.

2. Appeal No. E/612/2005, where M/s. G. Tex Dyeing & Printing Mills Ltd. was the appellant, was dismissed due to non-compliance with the stay order. The present appellant was jointly adjudicated with M/s. G. Tex Dyeing & Printing Mills Ltd., as per Order No. 8/2004, dated 5th February, 2004.

3. The adjudication order highlighted the present appellant as an authorized signatory, citing a failure to record specific transactions. However, the order did not demonstrate how the appellant's actions prejudiced the revenue. The Adjudicating Authority's conclusion of criminal intention based solely on an affidavit lacked substantial evidence to prove the appellant's involvement in creating fake documents.

4. The judgment emphasized the necessity of concrete evidence to support the claim of the appellant's criminal intent. Without substantial proof indicating the appellant's role in fabricating documents or influencing the retraction of the affidavit, the imposition of a penalty of Rs. 60,000 was deemed unjustifiable.

5. Due to the lack of examination and corroborative evidence establishing the appellant's direct involvement in the creation of fake documents or the influence on the affidavit, the penalty imposed on the appellant was waived. The judgment allowed the appellant's appeal, emphasizing the importance of substantial evidence to uphold penalties in such cases.