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2017 (5) TMI 1190 - AT - Central ExcisePenalty u/r 26 of CER, 1944 - clandestine manufacture and removal of exempt goods - non-accountal of receipt of raw material - Held that - there is no evidence produced by the appellant to indicate that there was no receipt of said raw material and there was no manufacturing on their part out of the said raw material. On the other hand, the statements on record proved that the subject goods were manufactured for which they have paid duty voluntarily on 15.2.2012 - penalty upheld. Penalty on Shri Deepak Agrawal - Held that - Shri Deepak Agrawal has been found to be controlling all activities of the appellant assessee. He has been the main person responsible for evasion of duty and for suppression of production and clandestine removal of said goods from the assessee s factory, thus wilfully, contravening the provisions of Central Excise Act and the Rules made thereunder - Though, Shri Agrawal has been main person responsible along with the assessee appellant for evasion of duty of Central Excise duty, considering that the equivalent penalty has been imposed on the assessee appellant, I take the lenient view and reduce penalty imposed on Shri Agrawal of ₹ 2 lakhs to ₹ 50,000/- only. Appeal allowed - decided partly in favor of appellant.
Issues Involved:
1. Receipt of raw materials without payment of duty. 2. Clandestine manufacture and removal of final products. 3. Admissibility and reliability of evidence. 4. Imposition of penalties. 5. Limitation period for demand of duty. Issue-wise Detailed Analysis: 1. Receipt of Raw Materials Without Payment of Duty: The appellants, M/s Goyal Energy & Steel Pvt. Ltd. (Appellant No. 1) and Shri Deepak Agrawal (Appellant No. 2), were found to have received 266.890 MTs of sponge iron from M/s Indian Steel and Power Pvt. Ltd. (ISPPL) without payment of Central Excise duty. This was corroborated by the statements of Shri Pankaj Jain, Director of ISPPL, and Shri Deepak Agrawal, Director of Appellant No. 1, both recorded under Section 14 of the Central Excise Act, 1944. The statements were not retracted, and the appellants voluntarily paid the duty amounting to ?9,02,374/-. 2. Clandestine Manufacture and Removal of Final Products: The appellants used the received sponge iron to manufacture 233.033 MTs of re-rolled products of iron and steel, which were then removed clandestinely without accounting for them in statutory records and without issuing invoices or paying the duty. The adjudicating authority confirmed the demand of duty and imposed penalties based on the evidence from the pen drive and ledger account recovered from ISPPL. 3. Admissibility and Reliability of Evidence: The appellants contested the genuineness of the pen drive and ledger account, arguing that no direct evidence was found at their premises. However, the tribunal held that the statements of the directors and the voluntary payment of duty were sufficient evidence. The tribunal cited the Hon’ble Supreme Court’s judgment in CCE Vs. Systems & Components Pvt. Ltd., stating that admitted facts need not be proved further. 4. Imposition of Penalties: The adjudicating authority imposed an equivalent penalty on Appellant No. 1 under Section 11AC of the Central Excise Act and a penalty of ?2,00,000/- on Appellant No. 2 under Rule 26 of the Central Excise Rules. The tribunal upheld the penalty on Appellant No. 1 but reduced the penalty on Appellant No. 2 to ?50,000/- considering his role in the evasion of duty. 5. Limitation Period for Demand of Duty: The appellants argued that the demand was barred by limitation. However, the tribunal found that the extended period of limitation under Section 11A(1) of the Central Excise Act was applicable due to the suppression of facts and contravention of provisions with intent to evade duty. Conclusion: The tribunal dismissed the appeal of M/s Goyal Energy & Steel Pvt. Ltd. and partly allowed the appeal of Shri Deepak Agrawal by reducing his penalty. The tribunal emphasized the importance of the admitted facts and voluntary payment of duty, which corroborated the clandestine activities and justified the imposition of penalties.
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