2001 (5) TMI 315 - AT - Central Excise

Summary

Issues:
- Imposition of penalty under Rule 209A of the Central Excise Rules on the appellant.
- Alleged evasion of excise duty by the company and individuals involved.
- Violation of principles of natural justice in passing the impugned order.
- Connection of the appellant with the company engaged in evasion.

Analysis:
1. Imposition of Penalty under Rule 209A:
The appellant, Shri S.K. Garg, filed an appeal against the penalty imposed by the Commissioner under Rule 209A of the Central Excise Rules. The appellant denied his connection with the company involved in evasion and argued that no penalty should be imposed on him. However, it was established that the appellant himself admitted to the evasion of excise duty by the company and voluntarily deposited the duty amount before the show cause notice was issued. The appellant was found to have managed the affairs of the company and traded goods through his own firms, leading to the imposition of the penalty under Rule 209A.

2. Alleged Evasion of Excise Duty:
The company, M/s. Kanpur Pesticides & Chemicals (P) Ltd., was found to be evading excise duty through under-valuation and misdescription of goods. The appellant, along with other individuals, admitted to the evasion and voluntarily deposited a substantial amount of duty. The Commissioner imposed penalties on the company and the individuals involved, including the appellant, for their roles in the evasion of excise duty, with the appellant being held guilty under Rule 209A for aiding and abetting the company in the evasion.

3. Violation of Principles of Natural Justice:
The appellant argued that there was a violation of principles of natural justice as he was not provided with copies of documents and could not file a proper reply to the show cause notice. However, the record indicated that the appellant was given opportunities for a personal hearing by the Commissioner. The appellant's own admission of involvement in the company's affairs and evasion of excise duty, along with the recovery of company records from his house, were considered sufficient grounds for imposing the penalty under Rule 209A.

4. Connection of the Appellant with the Company:
The appellant contended that he had no connection with the company involved in the evasion of excise duty. Despite his denial, the Commissioner found evidence to the contrary, including the appellant's admission of managing the company's affairs and trading goods through his own firms. The Commissioner rejected the appellant's plea of non-involvement based on the evidence presented, leading to the imposition of the penalty under Rule 209A.

In conclusion, the Appellate Tribunal upheld the penalty imposed on the appellant, dismissing his appeal for lack of merit. The judgment emphasized the appellant's admission of involvement in the company's affairs and evasion of excise duty, which justified the penalty under Rule 209A. The decision highlighted the lack of legal infirmity in the Commissioner's order, affirming the validity of the penalty imposed on the appellant in connection with the evasion of excise duty by the company.