1997 (6) TMI 227 - AT - Central Excise

Summary

Issues Involved:
1. Clubbing of clearances of M/s. Paramount Electro Plating Works (PEP) and M/s. Paramount Engineering Corporation (PEC)
2. Demand of duty based on unrecorded clearances
3. Validity of statements and evidence
4. Limitation period for raising the demand
5. Penalty imposition and quantum

Issue-wise Detailed Analysis:

1. Clubbing of Clearances:
The central issue was whether the clearances of M/s. Paramount Electro Plating Works (PEP) and M/s. Paramount Engineering Corporation (PEC) should be clubbed for duty purposes. The lower authority concluded that the production of excisable goods was carried out at PEP's premises, and only polishing was done at PEC. Statements from key individuals, including the managing partner of PEP and the proprietor of PEC (who is his son), supported this finding. The Tribunal upheld this conclusion, noting that no evidence was provided to show that PEC had the necessary machinery for manufacturing the goods. Therefore, all clearances were considered to have been made by PEP to exploit the exemption notification.

2. Demand of Duty Based on Unrecorded Clearances:
The duty demand included both recorded and unrecorded clearances. The recorded clearances were not disputed. However, for unrecorded clearances, conflicting statements were presented: one set indicated Rs. 75,000 per month, while another stated Rs. 2.5 lakhs per year. The Tribunal noted that the lower authority should have analyzed a specific register (Sl. No. 28 of the mahazar dated 2-5-1990) that contained details of unrecorded sales. The case was remanded for re-examination of the quantum of unrecorded clearances based on this register.

3. Validity of Statements and Evidence:
The appellants argued that the statements relied upon by the lower authority were not voluntary. However, the Tribunal found no evidence or specific claims of coercion or compulsion. The statements had not been retracted, and no cross-examination of the officers was sought. The Tribunal held that the statements were admissible and credible.

4. Limitation Period for Raising the Demand:
The appellants contended that the demand was time-barred, as the authorities were aware of the units' existence and their manufacturing activities. The Tribunal, however, agreed with the department that the appellants had suppressed information with the intent to evade duty, justifying the extended limitation period.

5. Penalty Imposition and Quantum:
The Tribunal acknowledged the appellants' involvement in clandestine removal and misuse of documents from another firm. Given the closure of the unit and the death of the managing partner, the Tribunal reduced the penalty on the company to Rs. 40,000 and on Shri Ravi to Rs. 10,000.

Conclusion:
The Tribunal upheld the clubbing of clearances and the demand of duty for recorded clearances. For unrecorded clearances, the case was remanded for re-examination based on the specific register. The validity of the statements was affirmed, the extended limitation period was justified, and the penalties were reduced considering the circumstances.