2017 (8) TMI 69 - AT - Central Excise

Penalty u/r 209A of the CER 1944 - job-work - clearance of goods without cover of any invoice and without paying the duty - Held that - appellant cleared the goods on simple private challans/jobwork challans without following the procedure prescribed in Central Excise Law. The culpability of appellants is also proved by the fact that during the day of search, unaccounted stock of 3232 pcs of Towels valued at ₹ 2,14,096/- was found. In the subsequent statements also, the Director of the appellant no. 1 admitted that they have been clearing the goods without issue of invoice and without payment of duty. These statements have not been retracted at any stage - the appellants have not been able to convince as to why the goods manufactured during 30.09.99 to 22.12.2009 were not entered in RG-1. The appellant did not make any entry of daily production continuously for 3 months. He has also given a finding that the procedures and safeguards for job work were not followed and appellants were clearing the goods on private challans/gate passes. We uphold the order of commissioner (Appeal) is relation to demand, interest and penalty on appellant no. 1 - The appellant no. 2 was clearly aware of clandestine clearances as he was responsible for day to day working of the company. Hence, penalty has also been correctly imposed on him. Appeal dismissed - decided against appellant.

Summary

Issues involved: Alleged excise duty evasion, failure to maintain statutory records, imposition of penalties on the appellants.

Analysis:

1. Alleged Excise Duty Evasion:
The case involved M/s Rangoli Furnishing (P) ltd. and its Director facing allegations of clearing excisable goods without issuing invoices and without payment of duty. The appellant admitted to these actions in various statements made on different dates. The Central Excise Officers found unaccounted stock during a visit, leading to the initiation of adjudication proceedings. The Tribunal noted that the appellants failed to enter details in the RG-1 register for a significant period, indicating a lack of compliance with Central Excise Law. The appellants were found to have cleared goods on private challans/jobwork challans without following prescribed procedures, further establishing their culpability.

2. Failure to Maintain Statutory Records:
It was observed that during the visit by Central Excise Officers, the appellants did not produce the required statutory records initially. Subsequently, the RG-1 register was discovered hidden beneath old records, with no entries made for almost three months. The Director of the appellant admitted to clearing goods without proper documentation and duty payment. This failure to maintain records and follow legal procedures contributed to the confirmation of duty demand and penalties.

3. Imposition of Penalties:
The Tribunal upheld the penalties imposed on both the company and its Director. The Director, being responsible for the day-to-day operations, was deemed aware of the clandestine clearances and, therefore, correctly penalized. The Tribunal agreed with the findings of the lower authorities and dismissed the appeals filed by the appellants, affirming the demand, interest, and penalties imposed.

In conclusion, the Tribunal found the appellants' actions inexcusable, as they failed to adhere to statutory requirements, leading to evasion of excise duty. The penalties imposed were deemed appropriate given the seriousness of the offenses committed. The judgment upheld the lower authorities' decisions, emphasizing the importance of compliance with Central Excise regulations to maintain the integrity of the taxation system.