2016 (1) TMI 334 - AT - Central Excise

Duty demand - clandestine removal of goods - whether the appellant number one was engaged in clandestine clearances of the goods without payment of duty or otherwise, and whether appellant number 2 is liable to be penalized under rule 26 of the Central Excise Rules 2002. - Held that - There are confessional statements of responsible personnel of the appellant number one, which indicate that there was concerted effort of clearing the goods clandestinely. The entire clandestine activity was also supported by the transaction books which were recovered from appellant number one. We find that appellant number one has mainly contested the charges on the ground that there was insufficient evidence and the investigating authorities never visited their factory nor any incriminating documents were recovered from them. It is seen from records that there was a categorical admission of the responsible person of appellant number one that MS bars were manufactured and cleared without payment of duty. We find that the entire evidence on which the revenue has relied upon was acquired from the broker who dealt with the appellant number one, for the sale of goods, clandestinely. We have perused the grounds of appeal taken by the appellant number one who is not contesting any of the findings recorded by the first appellate authority. In view of this, we do not find any merits in the appeal filed by the appellant number one, accordingly, we uphold the order that confirms the demands on them with the consequences of interest and penalty. - We do not find any reason to set aside such a reasoned order for the imposition of penalty. However, the appellant being an individual, we reduce the penalty imposed on the appellant number 2 - Appeal disposed of.

Summary

Issues:
1. Clandestine clearances of goods without duty payment by Appellant number 1.
2. Liability of Appellant number 2 under rule 26 of the Central Excise Rules 2002.

Analysis:
1. Clandestine Clearances by Appellant number 1:
The Tribunal noted that Appellant number 1, M/s Shiva Steel Rolling Mills, was unrepresented despite multiple listings and hearing notices sent to their last known address. The case involved whether Appellant number 1 was engaged in clandestine clearances of goods without duty payment. The Tribunal observed that there were confessional statements by responsible personnel of Appellant number 1 indicating a concerted effort in clearing goods clandestinely. The evidence included transaction books recovered from Appellant number 1, supporting the clandestine activity. Appellant number 1 contested the charges citing insufficient evidence and lack of incriminating documents recovered during investigations. However, a responsible person of Appellant number 1 admitted to manufacturing and clearing MS bars without duty payment. The evidence relied upon by the revenue was obtained from a broker dealing with Appellant number 1 for the clandestine sale of goods. The Tribunal upheld the order confirming demands on Appellant number 1, including interest and penalty, as the grounds of appeal were not contested, and no merit was found in their appeal.

2. Liability of Appellant number 2 under Rule 26:
Regarding Appellant number 2, Mr. Pravesh Gautam, the Tribunal observed that the revenue's case was based on various statements indicating that Appellant number 2 received and purchased goods clandestinely from Appellant number 1. Although Appellant number 2 retracted the statements, the Tribunal found that the penalty provisions were correctly invoked due to dealing with goods liable for confiscation. The arguments presented in defense were deemed ineffective, especially as Appellant number 1 admitted to clearing goods clandestinely to Appellant number 2. Consequently, the Tribunal upheld the penalty imposition on Appellant number 2 but reduced the penalty amount to Rs. 25,000 due to being an individual. The reasoned order for penalty imposition was upheld, and no reason was found to set it aside.

In conclusion, the appeals were disposed of accordingly, with the Tribunal ruling in favor of the revenue's contentions against both Appellant number 1 and Appellant number 2 based on the evidence and statements presented during the proceedings.