2001 (7) TMI 481 - AT - Central Excise

Summary

Issues Involved:
Appeal against Order-in-Original No. 16/97 - Failure to consider submissions, grounds, and evidence, fresh certificate for factory, small scale unit status, duty evasion intention, penalty imposition on Managing Partner, invocation of extended period, short levy confirmation, penalty sustainability.

Analysis:

1. Failure to Consider Submissions, Grounds, and Evidence:
The appeals arose from Order-in-Original No. 16/97, where the Commissioner of Central Excise, Madurai was alleged to have failed to consider various submissions, grounds, and evidence before adjudicating the matter. The appellants contended that the Commissioner's order was erroneous and unsustainable in law due to this failure, leading to the vitiating of the order.

2. Fresh Certificate and Small Scale Unit Status:
The appellants were issued a fresh certificate with a new number for their factory under the Factories Act, 1948. They claimed to be a small scale unit and had provided the necessary information in the prescribed format. They argued that the Superintendent should have been aware of any previous manufacturer using the premises, which they were not obligated to disclose unless asked. The failure of the Superintendent to notice this information was highlighted as a reason for not penalizing the appellants.

3. Penalty Imposition on Managing Partner:
The Managing Partner, Shri S. Rajan, was penalized without any specific finding against him or establishing a direct involvement in the alleged violation. The appellants argued that the penalty imposed on the Managing Partner should be set aside as there was no evidence of his direct nexus to the violation.

4. Invocation of Extended Period and Short Levy Confirmation:
The Commissioner invoked the extended period under Section 11AF of the Central Excise Act, 1944, due to alleged suppression of information regarding the previous manufacturer utilizing the same premises. However, the Tribunal found this invocation unsustainable, citing the Superintendent's duty to inquire and the lack of evidence of intentional suppression. Consequently, the short levy confirmation was deemed invalid.

5. Penalty Sustainability:
The order-in-original imposing penalties on M/s. Dinesh Greases and the Managing Partner under relevant rules was challenged. The Tribunal held that the penalties were not sustainable, considering the lack of evidence linking the Managing Partner directly to the violation and the absence of intentional duty evasion by the appellants. As a result, the penalties were set aside.

In conclusion, the appeals were allowed, and any consequential relief was granted as per the law, based on the findings that the Commissioner's order was unsustainable due to the lack of proper consideration of submissions and evidence, the invalid invocation of the extended period, and the unsustainable penalties imposed.