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TMI Blog2008 (12) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 11AC. In addition penalty of Rs. 50 lakhs stand imposed under Rule 25, on the said appellant. Penalty of Rs. 1 lakh is imposed upon M/s. Motorol Speciality Oils Ltd. and penalty of Rs. 50,000/- on M/s. Motorol Lubricants (P) Ltd. in terms of Rule 26 of Central Excise Rules. Penalty of Rs. 25 lakhs is imposed on Shri R.S. Gandhi, Managing Director of M/s. Motorol Technologies Ltd. and Rs. 50,000/- on Shri H.S. Nagraj, Manager of said M/s. Motorol Technologies Ltd. 2. As per facts on record M/s. Motorol Technologies Ltd. are engaged in the manufacture of Lubricating Oil falling under chapter heading 2710.90 of the Schedule of Central Excise Tariff Act. Their factory was visited by the Preventive Branch of Central Excise officers on 13-6-2002, who conducted various checks and verifications in the presence of two independent panchas and Shri P.R. Patel, Production Superintendent of the said company. Physical verification of the finished goods lying in the factory was found in excess to the tune of around Rs. 7.85 lakhs involving Central Excise duty of Rs. 75,380/- Inasmuch as the said goods were not entered in Daily Stock Account Register, the same were seized. It was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity, proof of transportation, receipt of money, confirmation by so-called buyers etc. to justify the clandestine production and removal. 3. The value adopted for calculating the demand of duty is highly inflated and arbitrary. 4. Duty demand of Rs. 1,91,347/- (Annexure I to SCN) is based on shortage of raw material (on assumption that finished goods manufactured therefrom was cleared without duty payment) and demand of Rs. 1,85,060/- (Annexure H to SCN) is based on alleged clandestine clearance on basis of invoices of M/s. Motorol Lubricants Pvt. Ltd and statement of Shri H.S. Nagraj. That there is no reason to believe why such demand cannot and does not already form part of the main demand mentioned at (1) above. 5. That there is no evidence of raw material purchase in such astronomically high volume so as to justify the Central Excise duty demand on the Appellant. That the most of the details contained in Annexure-L to the SCN (running page 145) contained the list of finished goods manufactured by the appellant and cannot be taken to mean the list of material purchased by the appellant. 6. That the SCN (running page 96-last para) as well as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the said Motorol Speciality Oil Ltd., and on which duty is being demanded in the present case. That such duty can be demanded either on the appellant or M/s. Motorol Speciality Oil Ltd. and not on both of them concurrently. 12. That the matter requires to be remanded back for verification of the above issues as regards duplication of demand, correct valuation to be adopted, corroborative evidence available and quantifiable to demand duty etc. 13. M/s. Motorol Technologies Ltd. have already paid an amount of Rs. 13.50 lakhs during the course of inquiry. 14. That a lenient view is required to be taken as regards the issue of penalty in the present matter. That the personal penalties are also unwarranted on the employees/directors, inasmuch as there is no evidence of them having dealt with goods liable to confiscation. Moreover, personal penalty under Rule 26 cannot be imposed on companies, i.e. M/s. Motorol Lubricants Pvt. Ltd. and M/s. Motorol Speciality Oil Ltd. 8. Ld. DR appearing for the Revenue has strongly contested the pleas of the appellant and has submitted that as discussed by Commissioner, there is ample evidences on record to establish the charges of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not paid were not being kept in the factory and the entries from the computer were being removed every month. The same facts stand admitted by Shri H.S. Nagraj, disclosing the details of the modus operandi adopted by the appellant for clandestine clearances. He has also disclosed the name of the customers and has stated that the clandestine sales were termed as cash sales. The above factors further stand corroborated by the statements of Shri V.K. Vora, Authorised Representative of the company. All the above evidences stand discussed by the Commissioner in para 47 of his order, which we reproduce below :- 47 I further observe that Shri H.S. Nagraj, Manager (Sales Administration), in his statement had stated that no duty was paid on invoices seized from his office on 13-6-03 and that the value and quantity as shown in diary and other statements are correct. He has also confirmed in his statements that the payment for the goods cleared without payment of duty was received in cash and the respective parties were aware of the fact that the excise duty was not paid on the goods, which were purchased by them in cash. He had also stated that the invoices for illicit removal were pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had confirmed these documents to be correct. Shri Jitendra K. Mistry, Labour Contractor in his statement had stated that he was the bill for Labour charges on the basis of these Production Reports and was receiving the payment by cash. 11. As such, the charges of clandestine removal further get corroborated from the labour contractor and the records maintained by him and the bills raised by him for the goods manufactured. Accordingly, we find that there is overwhelming evidence available in the present case establishing it beyond doubt that the appellant s use indulging in clandestine removals. All the statements recorded during investigation are corroborative of each other. Further, the records maintained by labour contractor fully tally with the pencil entries in private records, thus lending further corroboration to charges of clandestine removals. Shortages of raw material and final product detected at the time of visit of the officers furthers the Revenue s stand. In the backdrop of the above evidence, assessee s contention that procurement of raw material and consumption of electricity does not stand investigated and proved, cannot be appreciated. It is not that in each ..... X X X X Extracts X X X X X X X X Extracts X X X X
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