2017 (3) TMI 1496 - AT - Central Excise

Clandestine removal - whether the ld. Commissioner (Appeals) have rightly reduced the demand confirmed on account of clandestine removal and also justified in reducing the penalty imposed on the respondent partner Dinesh Kumar Johary? - Held that - no case of deliberate default of the provisions of law is made out to the effect that the respondents were knowingly that the branded goods are liable to tax and clearing the same without payment of duty so as to evade payment of duty. Thus no case of clearance with intent to evade duty is made out against the respondents. Further under the facts and circumstances the ld. Commissioner (Appeals) have erred in reducing the demand of duty and in view of the categorical admission by both the partners wherein the proximate quantity of clearance have also been stated. I hold that ld. Commissioner (Appeals) have erred in reducing the duty demand and accordingly I restore the demand of duty to 3, 11, 100/-. No case of deliberate defiance of the provisions of the Act and the Rules and/or suppression of facts is made out against the respondent firm and the partner I set aside the penalties imposed on them. Appeal dismissed - decided partly in favor of appellant.

Summary

Issues:
- Reduction of demand and penalty by the Commissioner (Appeals)
- Admission of clearance of branded goods without payment of duty
- Allegation of deliberate default and intent to evade duty
- Imposition of penalties on the respondent firm and its partners

Reduction of Demand and Penalty by the Commissioner (Appeals):
The appeal by Revenue questioned the reduction of demand and penalty by the Commissioner (Appeals) based on the admission of the partners regarding the clearance of branded glass shells without duty payment. The Commissioner observed that the case relied heavily on the partners' statements, except for a specific amount supported by sales records. The reduction was made to a lesser amount, leading to the appeal by Revenue.

Admission of Clearance of Branded Goods without Payment of Duty:
The partners admitted on different dates the clearance of branded glass shells without duty payment, with one partner providing details of the quantity and value of clearances. The partners also contradicted statements from buyers and confirmed the closure of production activity. The partners voluntarily deposited certain amounts towards duty payment, indicating acknowledgment of the liability.

Allegation of Deliberate Default and Intent to Evade Duty:
The Tribunal found no evidence of deliberate default or intent to evade duty by the respondents. It was noted that there was no indication that the respondents knowingly avoided duty payment on branded goods. The Tribunal concluded that there was no case of clearance with the intent to evade duty against the respondents.

Imposition of Penalties on the Respondent Firm and Its Partners:
The Tribunal set aside the penalties imposed on the respondent firm and its partners, citing the lack of evidence for deliberate defiance of laws or suppression of facts. The Tribunal emphasized that since no deliberate violation was established, the penalties were unwarranted. The appeal by the Revenue was allowed in part, restoring the demand of duty, while dismissing the appeal of the Revenue regarding penalties.

This detailed analysis of the legal judgment highlights the key issues, findings, and conclusions related to the reduction of demand, admission of clearance without duty payment, allegations of deliberate default, and imposition of penalties on the respondent firm and its partners.