2022 (4) TMI 727 - AT - Central Excise

Clandestine Removal - Re-rolled products - cross-examination sought by the manufacturer not granted - third party evidences - penalty under Rule 25 of the CER, 2002 - HELD THAT - Both the adjudicating authority has considered the entire records and evidences as is against the appellant and imposed the penalty. It is found that there is confessional statement of Appellant, the entire clandestine activity was also supported by the transactions recorded in records which were recovered from appellant. Further the Manufacturer, M/s Chamunda Rolling Mills Pvt. Ltd. also not disputed the demand of central excise duty involving the role of appellant in this matter. Penalty - HELD THAT - The penalty provisions were correctly invoked to impose penalty on him. There are no reason to set aside such a reasoned orders for the imposition of penalty. However, the appellant being an individual and considering overall facts of this case, the penalty imposed on the appellant reduced to ₹ 50,000/-. Appeal allowed in part.

Summary

Issues:
- Alleged evasion of Central Excise Duty through clandestine removal of re-rolled products
- Liability of the broker for penalty under Rule 26 of Central Excise Rules 2002

Analysis:
1. Alleged Evasion of Central Excise Duty: The case involved an inquiry by the anti-evasion branch regarding the evasion of Central Excise Duty by certain re-rolling units. The investigation revealed clandestine removal of excisable goods facilitated by brokers without invoices or duty payment. Statements, notebooks, and diaries indicated cash transactions for goods. A show cause notice was issued, leading to the confirmation of duty demand, interest, and penalties by the adjudicating authority. The appeal against this order was rejected by the Commissioner (A), prompting the appellant to file the present appeal.

2. Liability of the Broker: The appellant, represented by a Chartered Accountant, argued that they acted solely as a broker and did not purchase or handle the goods in question. Referring to past cases where penalties were set aside for similar situations, the appellant sought relief from the penalty imposed under Rule 26. On the other hand, the Revenue contended that incriminating documents seized from the appellant's premises, along with admissions, established the appellant's involvement in transporting and dealing with excisable goods without proper documentation or duty payment. The Revenue maintained that the penalty was rightfully imposed under Rule 26(1) of CER, 2002.

3. The Tribunal, after considering arguments from both sides and examining the records, found that the adjudicating authority had correctly imposed the penalty based on the evidence, including confessional statements and documents recovered from the appellant. The Tribunal noted that the manufacturer involved did not dispute the demand of Central Excise Duty related to the appellant's actions. While the appellant cited previous tribunal orders where penalties were set aside, the Tribunal distinguished those cases based on the lack of contestation by the manufacturer and the absence of third-party evidence challenges. Consequently, the Tribunal upheld the penalty but reduced it to ?50,000 considering the appellant's individual status and overall circumstances.

4. In conclusion, the Tribunal partly allowed the appeal, reducing the penalty imposed on the appellant. The decision was pronounced in open court on 12.04.2022.