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TMI Blog2015 (1) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... oods in contravention of the provisions of the rules themselves and not accounting the same. There is a clear case where both rules have been invoked and applied and merely because the duty liability is determined that is of M/s. S.R. Industries Ltd. and not of appellant No. 1, does not mean that in the facts and circumstances the imposition of penalty was not called for. The imposition of penalty was the cumulative effect of all the events and totality of the circumstances which enable the Commissioner to record the findings that fictitious entity was floated. It was shown to be export-oriented unit and though in its activity it did not require PTY/PFY, these goods were ordered for the alleged requirement of such unit. They were diverted firstly through the six units from Gujarat/Silvassa and by producing the documents and certifying and evidencing their supply for export-oriented unit and secondly in connivance with all concerned, such goods were diverted to Bhiwandi local market. In addition to their role in facilitating the other parties in diversion of such goods which were admittedly excisable that the penalty has been imposed, merely because the appellant No. 1 has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice that the appellants case is that no duty can be demanded in respect of the goods cleared on the strength of CT-3 certificates and on the basis of bond executed by the consignee. Therefore, it is the end user consignee who protects the interest of the Revenue. The searches were conducted at the units and what has been alleged further in the show cause notice is that the statements of the concerned persons, were recorded. 4. The show cause notice was adjudicated and an order was made thereon, styled as an Order-in-Original, dated 27th October 2005. That was challenged and was the subject matter of the Appeals before the CESTAT inter alia by the appellants in three Appeals before us. The First Appeal is by a limited company namely the successor of Sarla Performance Fibers Ltd. and two Appeals by Shri Krishna Kumar Jhunjhunwala and Sushil Deora. The Tribunal has dismissed these Appeals and it is not necessary to refer to the detailed findings. The only contention raised by Mr. Shah appearing in support of these Appeals is that Rule 173Q and 209 of the Central Excise Rules, 1944 could not have been invoked and applied so as to impose penalty on the appellants. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, then, the only aspect which has to be noted is the responsibility and culpability. This is a case where the goods have been diverted to the local Bhiwandi market with the help of unscrupulous brokers by the licensee, which the appellants assisted and facilitated and the parties are named in paragraph no. 11 in the Order-in-Original, then, all the more such findings of fact do not raise any substantial, question of law. Mr. Jetly submits that Rule 173Q and 209 can be invoked also for imposing penalty for removal of any excisable goods in contravention of any of the provisions of the rules or if the assessee does not account for any excisable goods manufactured, produced or stored or enters wilfully any wrong or incorrect particulars in the invoice issued for the excisable goods dealt with by him with intent to facilitate the buyer to avail of credit of the duty of excise in respect of such goods which is not permissible under these rules. Thus, it is not only contravention of any of the provisions of the Rules with intent to evade payment of duty that the penalty can be imposed. For all these reasons, it is submitted that the appellants are challenging the concurrent findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider the submission of Mr. Shah. We find from the reading of relevant paragraphs of the impugned order that there appears to be no dispute with regard to these events and role of the parties therein. However, we further find and as is now being urged that so far as appellant Nos. 7, 8 and 9 in the Appeals before the Tribunal, as is clear from paragraph no. 14 page no. 243 of the paper book, restricted their arguments to the imposition of the penalties. The Tribunal has dealt with the only argument noted in this paragraph. There appears to be no argument that the noticees were not put to notice with regard to the allegations and particularly of violation of Rules 173Q and 209, that such rules have been invoked and in the light of the allegations with regard to evasion of payment of duty. What appears to us as very clear is the fact that the arguments were restricted to compliance with the procedure and rules. The argument was that the goods were supplied to M/s. S.R. Industries Ltd. under Notification No. 1/95 by following correct procedure namely CT-3 certificates and Re-warehousing certificates. There was nothing wrong done and hence no penalty be imposed. These arguments have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , leviable on the same. Once we find that there is no specific case as of the Central Excise Rules, then prevailing have not been contravened, and there is no intention to evade payment of duty, then, the argument of Shri Shah raised for the first time before us cannot be accepted. The findings are not based only on the admitted contravention of the rules with intention to evade payment of duty but also removal of excisable goods in contravention of the provisions of the rules themselves and not accounting the same. There is a clear case where both rules have been invoked and applied and merely because the duty liability is determined that is of M/s. S.R. Industries Ltd. and not of appellant No. 1, does not mean that in the facts and circumstances the imposition of penalty was not called for. The imposition of penalty was the cumulative effect of all the events and totality of the circumstances which enable the Commissioner to record the findings that fictitious entity was floated. It was shown to be export-oriented unit and though in its activity it did not require PTY/PFY, these goods were ordered for the alleged requirement of such unit. They were diverted firstly through the si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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