2015 (10) TMI 337 - AT - Central Excise

Waiver of pre deposit - Clandestine removal of goods - Held that - Facts states by M/s. Maruthi Ploybags Pvt. Ltd., although prima facie convinces to certain extent to appreciate violation of natural justice, the material gathered during investigation equally demonstrates prejudice caused to Revenue by it. Accordingly, direction for pre-deposit against all the appellants is warranted in the fitness of the circumstances of the case. - Making overall assessment of the facts and circumstances of the case and striking out balance between the case of the Revenue and pleadings of the appellants, the appellants are directed pre-deposit of the following amount within six weeks - Stay granted.

Summary

Issues: Violation of principles of natural justice in adjudication, Pre-deposit requirement, Penalty imposition on Managing Director, Allegations against a party not involved in the show cause notice

Violation of principles of natural justice in adjudication:
The judgment addresses the issue of a gross violation of principles of natural justice in the adjudication process. The appellants were deprived of copies of relied-upon documents by the Adjudicating Authority, impacting their ability to defend themselves adequately. The show cause notice was issued without annexing the relied-upon documents, hindering the appellants' defense preparation. Despite representations and requests for documents, the adjudication order was passed without providing the necessary documents to the appellants. This lack of access to relied-upon documents prejudiced the appellants' interests and violated natural justice principles.

Pre-deposit requirement:
The judgment mandates a pre-deposit against all the appellants due to the material gathered during the investigation demonstrating prejudice caused to the Revenue. The appellants are directed to make specific pre-deposits within a stipulated timeline to comply with the order. The pre-deposit amounts vary for each appellant and must be made within six weeks from the specified date. Failure to comply with the pre-deposit requirement could result in adverse consequences for the appellants.

Penalty imposition on Managing Director:
Regarding the penalty imposed on the Managing Director, the appellant contested that the individual was not instrumental or consciously involved in the alleged evasion, making the penalty unwarranted. The appellant argued against the levy of the penalty amount, emphasizing the lack of direct involvement in the evasion activities. The judgment considers this argument in the context of the overall assessment of the case and the balance between the Revenue's position and the appellants' pleadings.

Allegations against a party not involved in the show cause notice:
The judgment also addresses the situation where one of the appellants was implicated in the proceedings despite not being directly involved in the show cause notice allegations. The party claimed victimization, stating that documents created by another entity led to their implication in the evasion activities. The appellant highlighted being a mere supplier of inputs and not directly dealing with excisable goods, challenging the penalty imposed under the Central Excise Rules. The judgment evaluates this argument in light of the specific circumstances and material evidence presented during the proceedings.