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2015 (9) TMI 673 - AT - Central ExciseWaiver of pre-deposit - clandestine removal of goods - validity of evidences - Penalty u/s 11AC and Rule 26 - Held that - Out of total duty demand of ₹ 74,06,356/-, ₹ 12.93 lakh is based on the entries in the purchase file recovered on 12/11/2008 from the premises of M/s.KIL at J-1200, Palam Vihar, Gurgaon , a portion of which was rented out to Shri Ravi Saini, an employee of KIL. There is no dispute that Shri Devender Arora, Managing Director of the appellant company in his statement dated 19.3.2009 when shown the above mentioned purchase file, admitted that the entries in this purchase file pertaining to his company are true, and that the goods had been supplied to KIL without payment of duty. However, out of duty demand of ₹ 12.93 lakh based on the entries in the purchase file, the appellant have already paid ₹ 10 lakh. The remaining duty demand of ₹ 61 lakh is based on the data retrieved from the pen drives and CPU. Duty demand of ₹ 44 crores had been raised against M/s.KIL based on the CPU data and the Commissioner by order dated 5.1.14 expressing doubt about the genuineness of that data has dropped the demand on the ground that the data has been tempered with. However, in the present case, the Commissioner while confirming the duty demand based on the data retrieved from the pen drives has not gone into the question as to whether the data is genuine or is tampered with. However, at this stage, we do not express any opinion as to the veracity of data retrieved from CPU/pen drives on the basis of which, the demand of ₹ 61 lakh has been against the appellant company. - Partial stay granted.
Issues:
1. Duty demand on the appellant company for clearances of M.S. Ingots without payment of duty. 2. Imposition of penalties on the appellant company and its director. 3. Adjudication of the show cause notice by the Commissioner. 4. Appeal against the Commissioner's order and stay applications. Analysis: Issue 1: Duty Demand on the Appellant Company The appellant company was found to have supplied M.S. Ingots to another company without payment of duty, leading to a duty demand of Rs. 74,06,356. The demand was based on documents recovered from the buyer's premises and data retrieved from seized pen drives and CPUs. The appellant contested the demand, arguing that the data's credibility was in doubt due to alleged tampering. The Commissioner confirmed the duty demand, but the Tribunal found discrepancies in the handling of the evidence. A partial waiver of the pre-deposit was granted, pending further examination of the data's authenticity. Issue 2: Imposition of Penalties In addition to the duty demand, penalties were imposed on the appellant company and its director under relevant sections and rules. The appellant challenged the penalties, citing procedural irregularities and questioning the reliability of the evidence. The Tribunal considered the submissions from both sides but did not delve into the merits of the penalties in this interim order. The pre-deposit requirement for the penalties was waived for the director, allowing the appeal to be heard without immediate payment. Issue 3: Adjudication by the Commissioner The Commissioner's Order-in-Original confirmed the duty demand and imposed penalties, prompting the appeals by the appellant company and its director. The Tribunal reviewed the Commissioner's findings, noting discrepancies in the treatment of evidence and the lack of thorough examination of data authenticity. The Tribunal directed the appellant to make a partial deposit, pending further assessment during the final hearing. Issue 4: Appeal and Stay Applications The Tribunal heard arguments from both sides regarding the stay applications filed by the appellant company and its director. The appellant contested the duty demand and penalties, emphasizing doubts about the evidence's integrity. The Tribunal acknowledged the concerns raised by the appellant but opted for a partial pre-deposit to proceed with the appeal process. The pre-deposit requirement for the penalties on the director was waived, allowing the appeal to be heard without immediate financial obligations. This detailed analysis outlines the key issues, arguments, and decisions in the legal judgment, highlighting the complexities of the case and the Tribunal's approach to addressing them.
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