2023 (10) TMI 1252 - AT - Central Excise

Clandestine removal - Principles of natural justice - non-service of SCN - appellant was the manufacturer of any excisable goods in the factory or not - casting/ forging (commonly known as Dhalai ) of LPG stove valve of brass and bar of brass (Saria) - levy of penalty u/r 26 of CER - HELD THAT - It is evident that the appellant was not available to receive the hearing notice at the known address of their/ his residence or factory premises. Therefore the service of hearing notices was effected by way of pasting the same at residential and factory premises under proper panchnama. That being so appellant cannot complain about non receipt of show cause notice or the hearing notice. He chose to abstain from the proceedings by not responding to the notices given. For the above reason the principles of natural justice have been sufficiently complied with and the appellant cannot claim any violation of the same. From the facts as admitted by the appellant and other in their statement recorded under Section 14 of the Central Excise Act, 1944 it is quite evident that factory at Gali No 15 Krishna Vihar Phase 1, Sevadham, Loni Gaziabad, is a factory jointly owned by the Appellant and his younger brother, without entering into any formal partnership. The factory has not been given any name nor has been registered with any of the government departments either centre or state. The entire activities undertaken in the factory were done clandestinely and no formal records were maintained about the operation. Appellant has not challenged any of the findings recorded by the Commissioner in the impugned order. When the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration - His active involvement in the clandestine activities is an admitted fact and penalty imposed on him under Rule 26 is total justified. There are no merits in this appeal - appeal dismissed.

Summary

Issues Involved:

1. Demand of Central Excise Duty.
2. Recovery of Interest.
3. Imposition of Penalty under Rule 25.
4. Imposition of Penalty under Rule 26.
5. Violation of Principles of Natural Justice.

Summary:

1. Demand of Central Excise Duty:
The Commissioner confirmed the demand of Central Excise duty amounting to Rs 1,14,85,955/- from the unit of Shri Pintu Tyagi and Shri Pradeep Tyagi under Section 11A (4) of the Central Excise Act, 1944. The investigation revealed that the unit was engaged in clandestine manufacturing and clearance of excisable goods without registration and payment of duty, leading to evasion of the said amount.

2. Recovery of Interest:
Interest on the aforesaid demand of Central Excise duty was ordered to be recovered till the date of payment under Section 11AA/11AB of the Central Excise Act, 1944.

3. Imposition of Penalty under Rule 25:
A penalty of Rs 1,14,85,955/- was imposed on Shri Pintu Tyagi and Shri Pradeep Tyagi under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944, for their involvement in the evasion of duty.

4. Imposition of Penalty under Rule 26:
Separate penalties of Rs 5,00,000/- each were imposed on Shri Pintu Tyagi and Shri Pradeep Tyagi under Rule 26 of the Central Excise Rules, 2002 for their acts leading to the evasion of duty.

5. Violation of Principles of Natural Justice:
The appellant contended that the impugned order was passed in violation of the principles of natural justice. However, the Tribunal found that sufficient notice and opportunity were given to the appellant to reply to the show cause notice and appear for personal hearing. The service of hearing notices was effected by pasting at the residential and factory premises under proper panchnama when the appellant was not available to receive them. The Tribunal held that the principles of natural justice were sufficiently complied with and the appellant could not claim any violation.

Conclusion:
The Tribunal dismissed the appeal, upholding the demand of duty, recovery of interest, and imposition of penalties. The Tribunal found no merit in the appellant's claim of non-involvement and violation of natural justice, affirming that the appellant was actively involved in the clandestine activities and the penalties imposed were justified.