2000 (1) TMI 126 - AT - Central Excise

Summary

Issues Involved:
1. Fixing the norms of production.
2. Confirmation of duty demand.
3. Imposition of penalties.

Summary:

1. Fixing the Norms of Production:
The appellants, manufacturers of kraft paper, were accused of clandestine removal of goods without payment of duty by maintaining parallel sets of books. The Department issued SCNs to the appellants for suppressed production and clandestine removal. The appellants contended that the norms of production were unilaterally determined without giving them an opportunity to defend their case. They argued that comparisons of production were odious and that the recovery of finished products depended on various factors. The Tribunal held that u/r 173E, the Commissioner is competent to determine the norms of production and found no illegality in comparing the production with another unit.

2. Confirmation of Duty Demand:
The Department based its case on certain retained documents and statements of employees, which the appellants claimed were obtained under coercion and later retracted. The Tribunal noted that the documents were provided to the appellants, and they had the opportunity to inspect the records. The Tribunal found no denial of natural justice and upheld the demand of duty, stating that the retraction of statements did not vitiate the proceedings as the Department did not rely solely on the statements.

3. Imposition of Penalties:
Penalties were imposed on the appellants' firms and individuals involved u/r 173Q and 209A for suppressing production and removing goods clandestinely. The Tribunal noted that the Directors and employees were involved in the clearance, transport, and storage of the goods, thereby attracting penalties. However, considering the facts and circumstances, the Tribunal reduced the penalties for the appellants and individuals involved.

Penalties Reduced:
1. M/s. RKMB: Rs. 5 lakhs
2. Shri Ashok Kumar: Rs. 50,000/-
3. Shri Nikhil Gupta: Rs. 40,000/-
4. Shri Mukesh Kumar: Rs. 10,000/-
5. Shri Hari Mohan Maheshwari: Rs. 10,000/-
6. Shri Sanjay Gupta: Rs. 5,000/-
7. Shri Jai Kumar: Rs. 10,000/-
8. Shri Pankaj Kumar: Rs. 20,000/-
9. Shri Chaman Lal: Rs. 25,000/-
10. Shri Promod Kumar Jain: Rs. 25,000/-

Conclusion:
The appeals were partly allowed with the reduction in penalties.