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2018 (1) TMI 14 - AT - Central ExciseClandestine removal of finished goods and raw material - fraudulent credit entries in PLA - CENVAT credit - penalties - personal penalties - natural justice - the first contention of the appellants is that the impugned order was passed ex-parte - Held that - the show cause notice was issued on 04.04.2000 and the same was first adjudicated on 27.11.2003. The adjudication order was remanded by Hon ble Tribunal vide Final Order dt. 25.06.2004 for fresh adjudication with a specific direction to the party to file reply in two months and to Ld. Commissioner to pass the final order within a period of 4 months from the date of receipt of the reply. In the remand proceedings, the appellants did not submit any reply despite repeated reminders and did not attend personal hearing despite being given a number of opportunities. We find that no reply was filed by the appellants either within the stipulated period or even till the date of adjudication. The opportunities given by the adjudicating authority have been narrated in the Paragraph 28-32 and 35 of the adjudication order. Hence, we find that sufficient chances were given to the appellants to present their case but the appellants did not avail those opportunities and hence we find that there is no violation of natural justice by the adjudicating authority. Further allegation of appellant is that the impugned order duty has been demanded on the basis of some unauthenticated entries in the resumed registers and notebooks - Held that - None of the documents which were recovered were disputed by the appellants and none of the statements have been retracted. It is undisputed that the appellants had taken credit of ₹ 18.5 lacs in their PLA during 26.09.1997 to 19.12.1997 on different dates without making deposits of any amount in the bank and utilized such illegal credit in PLA for clearance of excisable goods. This shows the wanton and deliberate violation of the law done repeatedly over a period of time - Further, there were parallel invoices recovered from the factory and also from the Ludhiana depot, which clearly shows that the goods under these invoices have been cleared clandestinely without payment of duty. There is sufficient corroborative evidence in respect of the confirmation of demands which the Ld. Commissioner has described in detail in Para 41.1 and 41.2 and Para 44 of his order - Department has been able to successfully prove the allegations of clandestine removal and evasion of duty done in various ways by the appellants as also the taking of illegal credit and illegal utilization of such credit by the appellants. Penalty on Sh. Deepak Singh, M.D. - Held that - he Managing Director was fully responsible for the fraud, which was played on the Revenue in various ways. Hence, separate penalty on Managing Director is fully justified. Penalty on Sh. VK Sachdeva, General Manager (Finance) - Held that - overall superintendence of excise matters rested with him and he was the fully aware of the law and implications of its violation. He has willfully connived with the management. His role in the fraud has been proven and hence the penalty on Sh. V.K. Sachdeva has been correctly imposed. Penalty on Sh. N.M. Gupta, AGM (cost and accounts) - Held that - Sh. N.M. Gupta, AGM has fully abetted in all the activities leading to clandestine removal of goods and clearance of goods without payment of duty and fraudulent evasion of central excise duty. Hence, the penalty imposed on him is fully justified. Personal penalties on three appellants - Held that - In the present case, the appellant employees were very much aware that the goods were liable to confiscation and what they were doing had implications of contravention of the laws; still, they willfully and systematically connived with the management in clandestine removal of goods through different modus operandi - penalties on the Managing Director, Sh. Deepak Singh, Sh. V.K. Sachdeva and Sh. N.M. Gupta, are upheld. Appeal dismissed.
Issues Involved:
1. Alleged clandestine removal of goods. 2. Fraudulent credit entries in PLA. 3. Personal penalties on various individuals under Rule 209A of Central Excise Rules. 4. Violation of principles of natural justice. 5. Enhancement of penalties in remand proceedings. Detailed Analysis: 1. Alleged Clandestine Removal of Goods: The case involves M/s Atma Tube Products Ltd. (ATPL) being accused of clandestine removal of finished goods and raw materials. The authorities found evidence of such activities during a search on 21.04.1999, which included incriminating documents and private records such as truck registers, weighment slips, and Golu registers. The demand was based on parallel invoices, weighment slips without corresponding invoices, and other private records. The Tribunal upheld the demand of ?1,10,41,745/- for the extended period along with interest, confirming that the appellants systematically and repeatedly evaded duty through various fraudulent means. 2. Fraudulent Credit Entries in PLA: The appellants were found to have taken credit of ?18.5 lacs in their PLA without making deposits in the bank, which was utilized for clearance of excisable goods. This fraudulent activity was confirmed by the Tribunal, emphasizing the deliberate violation of the law over an extended period. The denial of Cenvat Credit of ?63,839/- along with interest and penalty of the same amount was also upheld. 3. Personal Penalties on Various Individuals: Penalties were imposed on several individuals under Rule 209A of Central Excise Rules, including Sh. Deepak Singh (Managing Director), Sh. V.K. Sachdeva (GM Finance), Sh. N.M. Gupta (AGM Costs & Accounts), and others. The Tribunal upheld the penalties, noting that these individuals were actively involved and aware of the clandestine activities. The statements recorded from these individuals were not retracted, and their involvement was corroborated by various evidences. - Sh. Deepak Singh: As the MD, he was aware of and involved in the fraudulent activities, including taking credit in PLA without depositing money. His penalty was upheld. - Sh. V.K. Sachdeva: He admitted to preparing parallel invoices and was aware of the clandestine removal of goods. His penalty was upheld but reduced from ?2,00,000/- to ?1,00,000/- due to the enhancement issue. - Sh. N.M. Gupta: He directed the preparation of parallel invoices and taking credit without deposit. His penalty was upheld but reduced from ?2,00,000/- to ?50,000/-. 4. Violation of Principles of Natural Justice: The appellants argued that the impugned order was passed ex-parte, violating the principles of natural justice. However, the Tribunal found that sufficient opportunities were given to the appellants to present their case, which they did not avail. The Tribunal cited previous judgments to support that natural justice was not violated in this case. 5. Enhancement of Penalties in Remand Proceedings: The appellants contended that the penalties imposed in the remand proceedings were higher than the earlier order without any change in circumstances or reasoning. The Tribunal agreed that the enhancement was not justified, reducing the penalties for Sh. V.K. Sachdeva and Sh. N.M. Gupta to their original amounts. Conclusion: The appeals of M/s ATPL and Sh. Deepak Singh were dismissed, upholding the penalties and demands. The appeals of Sh. V.K. Sachdeva and Sh. N.M. Gupta were partly allowed with a reduction in penalties. The Tribunal confirmed the systematic and deliberate evasion of duty by the appellants, supporting the findings of the adjudicating authority. The order was pronounced on 14/12/2017.
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