2017 (6) TMI 621 - AT - Central Excise

SSI exemption - dummy unit - Held that - the appeal filed by ABC, as per the intimation given by the ld. Advocate and as per the provisions of Rule 22 of the CESTAT Procedural Rules, 1982, the appeal filed by the ABC, Proprietor Shri P. Prabhakaran shall abate - the appellant was privy to the commission of the offence committed by the main appellant. However, there is no discussion or elucidation of his active role in the whole alleged modus. In any case, since the penalty on the employer DMML has been scrapped by the lower appellate authority, there is no justification for penalty on the employee - appeal allowed - decided in favor of appellant.

Summary

Issues:
Proceedings against multiple appellants for alleged Central Excise duty evasion using a dummy unit.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai involved three appeals arising from the same impugned order concerning the Department's proceedings against M/s. Angel Beauty Care (ABC) and others for allegedly availing exemption limit wrongly beyond ?100 lakhs by utilizing a dummy unit, M/s. Shanthi Enterprises. The original authority confirmed duty liability on ABC, imposed penalties under various sections of the Central Excise Act, 1944, and also penalized other entities and individuals allegedly involved in facilitating the evasion. The Commissioner (Appeals) partially set aside penalties on some appellants while affirming others. The appeals before the Tribunal challenged these decisions.

During the hearing, it was noted that the proprietor of ABC had passed away, leading to the abatement of proceedings against ABC. The role of Smt. P. Pushpam, sister of the proprietor, was also considered. The Tribunal acknowledged that Smt. Pushpam had a limited role and reduced her penalty significantly due to her lack of direct involvement and advanced age with health issues. The penalty on another appellant, Shri A.R. Hegde, was contested, with arguments made regarding his limited role and the setting aside of penalties on his employer. The Tribunal ultimately set aside the penalty on Shri Hegde based on the lack of justification in light of the employer's penalty being dropped.

In conclusion, the Tribunal abated the appeal filed by ABC due to the proprietor's demise and reduced the penalties on Smt. P. Pushpam and Shri A.R. Hegde considering their limited roles and other circumstances. The judgment provided detailed reasoning for each appellant's case, leading to the disposal of all three appeals with appropriate adjustments as per law.