2000 (8) TMI 100 - HC - Central Excise

Summary

Issues:
Application under Section 35H of Central Excise Act, 1944 for reference in respect of duty demand and penalties upheld by Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). Allegations of duty evasion and penalties against the company and its directors. Dispute regarding seized records, production capacity, and stock verification. Tribunal's decision to cancel penalty under Section 11AC but uphold penalty under Rule 173Q. Challenge to Tribunal's order as perverse and failure to consider various aspects and materials.

Analysis:
The case involved an application under Section 35H of the Central Excise Act, 1944, seeking reference in a matter where duty demand and penalties imposed by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) were under challenge. The Tribunal had confirmed duty demand and penalties against the company and its directors based on allegations of duty evasion related to the production and clearance of cement. The company disputed the sufficiency of evidence on record to sustain the duty and penalties, particularly challenging the penalty under Section 11AC as the alleged offense predated the provision's introduction in September 1996. Additionally, the company contested penalties imposed under Rule 173Q and Rule 209A on the directors, arguing that the necessary ingredients for such penalties were not established. The Tribunal examined seized records from the factory premises, which indicated clandestine removal of cement, and rejected the company's claims that the records did not pertain to them. The Tribunal also considered discrepancies in production capacity statements and stock verification issues, ultimately upholding the duty demand but canceling the penalty under Section 11AC while reducing the penalty under Rule 173Q.

The petitioner raised several contentions challenging the Tribunal's order, alleging procedural irregularities during the search, threats to the accountant, discrepancies in stock verification, and failure to consider various aspects and materials on record. However, upon review, the High Court found that the Tribunal had adequately addressed each contention raised by the petitioner and had made factual findings based on the evidence and materials on record. The High Court emphasized that factual findings and conclusions, unless based on a misapplication of law, do not give rise to legal questions. It clarified that the Tribunal's role as a fact-finding authority is final, especially in cases where findings are based on evidence and lead to the ascertainment of basic facts without the application of legal principles. The High Court concluded that the Tribunal had considered all relevant materials and reached its decision without any legal infirmity, dismissing the petition as no question of law arose from the Tribunal's order.