1993 (11) TMI 76 - CGOVT - Central Excise

Summary

Issues:
1. Allegation of non-compliance with natural justice principles.
2. Validity of statements made by partners.
3. Dispute regarding the location of the head office.
4. Distinction between the revision applicants and Bengal Sales Agency.
5. Installation of power press machine without intimation.
6. Clandestine production of excisable goods.
7. Imposition of personal penalty.

Issue 1 - Allegation of non-compliance with natural justice principles:
The applicants alleged non-observance of natural justice principles, claiming insufficient opportunity for a hearing. However, the government found that multiple opportunities were provided for hearings, and the applicants failed to respond or avail themselves of these opportunities. The government clarified that natural justice requires a reasonable opportunity to be granted, and there was no violation in this case as sufficient chances were given for the applicants to present their case.

Issue 2 - Validity of statements made by partners:
The government emphasized that statements made by partners should be evaluated in conjunction with other evidence and cannot be dismissed solely on grounds of inducement. Merely alleging inducement is not enough to discredit such statements.

Issue 3 - Dispute regarding the location of the head office:
The applicants disputed the location of their head office, claiming it was not the same as the premises where goods were seized. However, the government noted that the applicants themselves admitted conducting business activities from the premises where the goods were seized, indicating a connection between the two locations.

Issue 4 - Distinction between the revision applicants and Bengal Sales Agency:
While the applicants argued that they were separate entities from Bengal Sales Agency, the government highlighted commonalities such as shared partners and business premises, indicating a close relationship between the two entities. The government found the argument of disassociation weak, especially considering the lack of records for purchases from other suppliers.

Issue 5 - Installation of power press machine without intimation:
The applicants installed a power press machine without notifying the Central Excise Department, claiming it was for producing non-excisable items. However, investigations revealed no stock of non-excisable goods, suggesting the machine was used for manufacturing excisable goods, supporting the allegation of clandestine production.

Issue 6 - Clandestine production of excisable goods:
Based on the evidence and discussions, the government upheld the confiscation of goods and their redemption on payment of fines and appropriate duty, concluding that the applicants were involved in clandestine production of excisable goods as alleged.

Issue 7 - Imposition of personal penalty:
The government acknowledged an error in the calculation of the penalty amount, leading to a reduction in the personal penalty imposed on the applicants. Granting the benefit of doubt, the government reduced the penalty from Rs. 10,000 to Rs. 5,000, while upholding the orders of the lower authorities in all other aspects.