2001 (2) TMI 379 - AT - Central Excise

Summary

Issues Involved:
1. Imposition of penalty on the appellant under Rule 209A of the Central Excise Rules.
2. Allegations of non-accountability of raw materials, production, and clandestine removal of goods.
3. Appellant's responsibility and knowledge as the manager of the firm.
4. Validity and sufficiency of evidence for the Commissioner's findings.
5. Applicability of legal precedents cited by the appellant.

Detailed Analysis:

1. Imposition of Penalty on the Appellant under Rule 209A:
The Commissioner imposed a penalty of Rs. 5 lakhs on the appellant, who was the manager of M/s. Saurabh Alloy Casting Ltd., under Rule 209A of the Central Excise Rules. The appellant's role and responsibility in the firm were central to determining the penalty. The Tribunal acknowledged the appellant's managerial position and overall incharge status, which included overseeing the production, receipt, and transportation of goods.

2. Allegations of Non-Accountability of Raw Materials, Production, and Clandestine Removal of Goods:
The Preventive Officers of the Central Excise Division II, Indore, during their visit on 5-3-1999, found discrepancies in the stock of finished goods and raw materials. The appellant admitted in his statement that the firm was processing raw materials on both modvatable and commercial invoices, and that there were discrepancies in the production register and heat register. The Commissioner's order detailed the non-accountability and clandestine removal of goods, which the firm did not contest further, leading to the acceptance of these findings.

3. Appellant's Responsibility and Knowledge as the Manager of the Firm:
The appellant admitted to being the overall incharge of production and transportation of goods. Statements from other individuals, such as Abdul Rahman and Bapu Saheb Jadhav, corroborated the clandestine removal of goods without proper documentation. The Tribunal inferred that the non-accountal of raw materials and clandestine removal of goods were done with the appellant's knowledge and consent, given his managerial role.

4. Validity and Sufficiency of Evidence for the Commissioner's Findings:
The Tribunal found the Commissioner's order to be detailed and based on substantial evidence, including the appellant's statements and other documentary evidence. The appellant's attempt to challenge the findings on the grounds of insufficient evidence was dismissed, as the firm had already accepted the liability by not pursuing their appeal.

5. Applicability of Legal Precedents Cited by the Appellant:
The Tribunal reviewed several legal precedents cited by the appellant, including cases under the Income Tax Act and other excise cases. It concluded that these precedents were not applicable to the present case due to differences in facts and circumstances. The Tribunal emphasized that the Commissioner's findings were based on substantial documentary evidence, unlike the cases cited by the appellant which lacked corroborative evidence.

Conclusion:
The Tribunal upheld the Commissioner's findings and the imposition of penalty under Rule 209A. However, considering the appellant's managerial status, the penalty was reduced from Rs. 5 lakhs to Rs. 2 lakhs. The appeal was disposed of with this modification, maintaining the overall findings of the Commissioner.