1995 (7) TMI 149 - AT - Central Excise

Summary

Issues Involved:

1. Evasion of duty and confiscation of goods and truck.
2. Imposition of penalties on partners without specific show cause notice.
3. Confiscation of the truck.

Detailed Analysis:

1. Evasion of Duty and Confiscation of Goods and Truck:

The appellants, M/s. Punjab Bottling Company, were found to have cleared substantial quantities of aerated water without payment of duty by using unauthorized duplicate gate passes with forged Central Excise Inspector's signatures. The Adjudicating Authority confirmed the evasion of duty based on detailed findings, including the statements of Sh. Charanjit Singh. The appellants did not seriously contest the levy of duty and gave up the claim of benefit under Notification No. 31/92. Consequently, the confiscation of 1188 crates of aerated water and Truck No. DEL-1377, along with the levy of duty, was upheld.

2. Imposition of Penalties on Partners Without Specific Show Cause Notice:

The main contention was that no specific show cause notice was issued to Sh. Charanjit Singh Anand and Sh. S.S. Dhanjal, partners of M/s. Punjab Bottling Company, for the imposition of penalties. The show cause notice was addressed to the firm but not explicitly to the partners. The Tribunal in previous cases (Mukha Mal Gokal Chand v. Collector of Customs and Central Excise, New Delhi and Kallatra Mahin v. Collector of Central Excise, Bangalore) held that issuing a show cause notice to the person concerned before imposing a penalty is mandatory. The absence of such a notice to the partners rendered the penalties imposed on them unsustainable. Therefore, the penalties on Sh. Charanjit Singh Anand and Sh. S.S. Dhanjal were set aside.

3. Confiscation of the Truck:

The truck used for transporting the goods was confiscated. However, the appellants contended that they employed a driver for plying the truck on hire and had no knowledge that the gate pass covering the consignment was not genuine. The learned DR could not provide specific evidence of connivance or knowledge. The Tribunal found that mere suspicion was insufficient for confiscation, fine, or penalty. Hence, the confiscation of the truck was set aside, and the appellants were entitled to the benefit of doubt.

Separate Judgments Delivered:

1. Jyoti Balasundaram, Member (J): Confirmed the duty demand and confiscation of goods and truck but set aside the penalties on the partners due to the absence of specific show cause notice to them.

2. S.K. Bhatnagar, Vice President: Agreed with the confiscation of goods and truck but opined that the matter of penalties should be remanded for de novo consideration after issuing fresh notices to the partners.

3. Harish Chander, President: Concurred with Member (J) that no specific show cause notice was issued to the partners for penalty, making the penalties invalid. Confirmed the confiscation of the truck as no arguments against it were advanced.

Final Order:

In view of the majority opinion, the demand of duty and the confiscation of the goods and the truck is confirmed, but the penalties imposed on Sh. Charanjit Singh Anand and Sh. S.S. Dhanjal are set aside.