2000 (9) TMI 441 - AT - Central Excise

Summary

Issues Involved:
1. Clandestine manufacture and clearance of excisable goods.
2. Contravention of Central Excise Rules.
3. Liability for penal action and interest.
4. Personal penalty on the Managing Director.

Summary:

1. Clandestine Manufacture and Clearance of Excisable Goods:
The Ld. Commissioner determined that M/s. UPL had received unaccounted raw material (plastic granules) and clandestinely manufactured and cleared finished excisable products, evading Central Excise duty amounting to Rs. 23,73,934/-. This was established through the scrutiny of seized records and statements indicating that the appellant had not accounted for 2,95,472 kgs. of plastic granules and clandestinely removed 2,65,395 kgs. of finished goods and 29,486 kgs. of waste and scrap without payment of duty.

2. Contravention of Central Excise Rules:
M/s. UPL was found to have contravened provisions of Rules 9(1), 52A, 53, 173G(4), 173F, and 226 of the Central Excise Rules by not recording production in their excise records and clearing goods without payment of duty. The Ld. Commissioner imposed a penalty under Rules 9(2), 52A, 173Q, and 226.

3. Liability for Penal Action and Interest:
The Ld. Commissioner imposed a penalty of Rs. 23,73,934/- under Rule 173Q read with Section 11AC of the Act and ordered penal interest on the unpaid duty as per Section 11AB. The Tribunal upheld the imposition of penalty but reduced it to Rs. 5 lakhs on M/s. UPL, considering the facts of the case.

4. Personal Penalty on the Managing Director:
Shri Dinesh Rustagi, MD of M/s. UPL, was held liable for penal action under Rule 209A for his conscious involvement in manufacturing, selling, and dealing in excisable goods liable for confiscation. The Tribunal reduced the personal penalty on Shri Dinesh Rustagi to Rs. 1 lakh.

Conclusion:
The Tribunal confirmed the clandestine manufacture and removal of excisable goods by M/s. UPL, upheld the demand for duty, and reduced the penalties imposed on the firm and its Managing Director. The appeals were disposed of accordingly.