2004 (4) TMI 664 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty demand against the manufacturing company.
2. Imposition of penalties on the company and its managing director.
3. Lack of opportunity for personal hearing.
4. Plea for leniency based on the size of the unit and one-man show argument.

Confirmation of Duty Demand:
The appeals were against the order confirming duty demand of Rs. 7,58,000/- and penalties imposed by the adjudicating authority. The Tribunal found no material to dispute the liability to duty, upholding the duty confirmation against the appellant company, which had already been paid. The Tribunal noted the absence of evidence to disprove the alleged surreptitious removal as stated in the show cause notice.

Imposition of Penalties:
Regarding the imposition of penalties, the Tribunal addressed the plea that Section 11AC was not applicable due to the timing of the removal. The penalties were imposed under Rule 173Q(2) of the Central Excise Rules, 1944, and Rule 209A for the company and managing director, respectively. The Tribunal found the penalties justified within the legal parameters, dismissing the argument against the imposition of equivalent penalty.

Lack of Opportunity for Personal Hearing:
The appellants raised a grievance about not being heard, despite admitting to missing the personal hearing scheduled by the lower authorities. The Tribunal emphasized that without providing reasons for not attending the hearing, the appellants could not demand further opportunities for a hearing. The failure to attend the hearing impacted their ability to argue for leniency or contest the charges effectively.

Plea for Leniency Based on Unit Size:
The appellants sought leniency based on the unit being small-scale and operated by the managing director alone. However, the Tribunal rejected this plea, highlighting that the evasion of duty was clear-cut, irrespective of the unit's size. The Tribunal emphasized that the law does not differentiate between small and large units in cases of duty evasion. The absence of grounds such as accounting errors due to lack of legal knowledge or a genuine belief warranted no interference in the lower authorities' orders. Consequently, the appeals were rejected, affirming the penalties and duty demand.