2013 (11) TMI 1345 - AT - Central Excise

Clandestine manufacture and clearance of MS ingots Retrieval of private records/data stored in a Pen-drive Waiver of Pre-deposit Held that - Prima facie, the Commissioner has dealt in detail the evidences retrieved from the Pen-drive from the employee of the Applicant and on comparison the said data with the statutory register maintained by the Applicant in the factory, discrepancies were noticed relating to the production and clearance of finished goods - the data which has been retrieved from the possession of the employee of the Applicant and the data has relevance to the statutory records maintained by the Applicant as there were common transactions between the data found in the Pen-drive and also entries in the statutory records - it is a question of appreciation of evidence and not a case of no evidence assessee directed to deposit 50% of the total amount of duty to be submitted as pre-deposit upon such submission rest of the duty to be stayed till the disposal partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty for Applicant No.1 and personal penalty for Directors.
2. Justifiability of personal penalty on Directors.
3. Allegations of clandestine manufacture and clearance of goods by Applicant No.1.
4. Involvement of Directors in the alleged activities.
5. Analysis of evidences and findings by the Revenue and the Tribunal.
6. Decision on the waiver of pre-deposit and penalties.

Analysis:
1. The Applicant, Ms. Auro Ispat (India) Pvt. Ltd., sought waiver of pre-deposit of duty and penalty, along with Directors seeking waiver of personal penalty. The Tribunal noted multiple adjournments due to lack of representation and the sale of the factory, leading to a focus on the evidences against the Applicant.

2. The Advocate argued against the personal penalty on Directors, stating lack of evidence implicating them in the alleged activities. The Tribunal considered the absence of proof of their involvement and referred to previous judgments to assess the justifiability of the penalties under Rule 26 of Central Excise Rules, 2002.

3. The Revenue presented evidence from a search at the Applicant's factory, including incriminating documents and data from a Pen-drive maintained by an employee, suggesting clandestine removal of goods without duty payment. The Tribunal reviewed the Commissioner's findings on the alleged activities during the relevant period.

4. The Tribunal highlighted the involvement of Directors based on the evidence gathered, indicating their knowledge and liability in the operations. An amount was deposited by the Applicant during the investigation, acknowledging some liability, while the Tribunal directed further deposits by the Directors within a specified timeframe.

5. The Tribunal analyzed the evidences, particularly data from the Pen-drive and its correlation with statutory records, indicating discrepancies in production and clearance of goods. The Tribunal refrained from delving into detailed evidence analysis but found relevance in the retrieved data for forming a prima facie opinion on the evasion of duty.

6. Considering the interest of Revenue and legal principles, the Tribunal directed the Applicant to deposit a specific amount, waived pre-deposit and penalties upon compliance, and stayed recovery during the appeal. Failure to deposit would lead to dismissal of the appeals without further notice, emphasizing the importance of fulfilling the directed payments within the stipulated timeline.