2000 (9) TMI 650 - AT - Central Excise

Summary

Issues Involved:
1. Confiscation of goods and confirmation of Central Excise Duty demand.
2. Imposition of penalties on various parties.
3. Allegations of clandestine manufacture and removal of goods.
4. Validity of evidence and statements.
5. Relationship and operations of the involved firms.
6. Limitation and suppression of facts.

Detailed Analysis:

1. Confiscation of Goods and Confirmation of Central Excise Duty Demand:
The Commissioner confiscated goods valued at Rs. 99,39,334/- and confirmed a demand of Central Excise Duty amounting to Rs. 53,55,862/- on goods valued at Rs. 2,71,54,179/-. The appellants were accused of suppressing production to evade duty. The Tribunal confirmed the duty demand, noting that the evidence, including the recovery of GR books and the presence of deep freezers, centrifugals, and fractional distillation columns, indicated ongoing production and clandestine removal of goods.

2. Imposition of Penalties:
Penalties were imposed on M/s. Quality Exports & Chemicals (Rs. 55 lakhs), Shri Mukul Gupta, Smt. Vandana Gupta, Smt. Veena Gupta (Rs. 10 lakhs each), and Shri Alok Tiwari (Rs. 10 lakhs). The Tribunal found the penalties to be on the higher side and reduced them to Rs. 5 lakhs for M/s. Quality Exports & Chemicals and Rs. 1 lakh each for the individuals.

3. Allegations of Clandestine Manufacture and Removal of Goods:
The Tribunal noted that the goods found in the premises were manufactured by M/s. Quality Exports & Chemicals and were not recorded in statutory books. The presence of operational equipment and the recovery of GR books supported the allegation of clandestine manufacture and removal. The Tribunal dismissed the appellants' claim that the equipment belonged to trading units and was used on a trial basis.

4. Validity of Evidence and Statements:
The Tribunal relied on the statements of Shri Sunil Kumar and Shri Alok Tiwari, who admitted that the GR books covered goods manufactured by M/s. Quality Exports & Chemicals. Although affidavits were later submitted to retract these statements, the Tribunal found them to be an afterthought and upheld the original statements as credible evidence.

5. Relationship and Operations of the Involved Firms:
The Tribunal examined the relationship between M/s. Quality Exports & Chemicals, M/s. Quality Chemicals, and M/s. Quality Flavours. It was found that these entities were interrelated and operated from the same premises, with common entries and exits. The Tribunal concluded that the trading units were only on paper and were used to facilitate the clandestine removal of goods manufactured by M/s. Quality Exports & Chemicals.

6. Limitation and Suppression of Facts:
The appellants argued that the demand was time-barred. However, the Tribunal held that there was suppression and misstatement of facts with the intention to evade duty, justifying the invocation of the extended period under Section 11A(1). The Tribunal confirmed that the demand was not time-barred and was sustainable in law.

Conclusion:
The Tribunal confirmed the duty demand of Rs. 53,55,862/- and reduced the penalties imposed on the appellants. The appeals were disposed of with these modifications, upholding the findings of clandestine manufacture and removal of goods, and the suppression of facts to evade duty.