2005 (10) TMI 183 - AT - Central Excise

Summary

Issues:
Challenging order passed by Commissioner of Central Excise - Duty evasion - Penalties and interest imposition - Appellants' appeal to Tribunal.

Detailed Analysis:
The appeals filed by M/s. Jai Shree Agro Industries Ltd. and two individuals challenged the order passed by the Commissioner of Central Excise, Delhi-III. The appellants were engaged in manufacturing pesticides and were availing modvat facility. The Department initiated investigations based on intelligence suggesting evasion of Central Excise duty through clandestine clearances and selling at higher values. A show cause notice was issued demanding duty on various grounds, including clearances from the factory on parallel invoices, finished goods removed without payment of duty, and differential duty on goods sold at higher values. The notice also contemplated penal action and interest charges. The Commissioner confirmed the demands totaling Rs. 45,55,209 and imposed penalties, leading to the appellants approaching the Tribunal in grievance.

The appellants' advocate provided a detailed breakdown of duty demands under various heads during the hearing. The appellants agreed not to contest certain demands confirmed in the original order, leading to a concession on those specific issues. Both sides presented arguments only on the remaining issue of duty demand on finished goods removed clandestinely without payment of duty between specific dates. The appellants argued that the procedure laid down in Rule 173II was not followed, but contended that Chief Commissioners could relax conditions. The Department's representative reiterated the Commissioner's findings, emphasizing the appellants' non-compliance with Rule 173H procedure.

After hearing both sides, the Tribunal held that the appellants had indeed cleared finished excisable goods without paying duty, citing discrepancies between factory invoices and outgoing gate passes. The demand confirmed by the Commissioner on specific issues was upheld, while the demand related to clearances of empty drums was dropped in line with a Supreme Court decision. The penalties imposed on the appellants were reduced to Rs. Twenty lakhs for the company and Rs. One Lakh each for the two individuals. The impugned order was modified accordingly, and the appeals were disposed of.

In conclusion, the Tribunal's judgment addressed the duty evasion allegations, penalty imposition, and procedural non-compliance by the appellants. The decision upheld certain demands while dropping others based on legal precedents and arguments presented by both sides during the hearing. The penalties imposed were reduced after considering the facts and circumstances of the case, leading to modifications in the original order.