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TMI Blog2019 (3) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... etters stating that the goods were seconds. If the goods were sent as samples to their respective customers to enhance their business, it is inconceivable that any businessman would send rejected sub-standard samples to promote their prime goods - the appellant has not substantiated his claim that the goods which they cleared were sub-standard goods. If they were, indeed, sub-standard goods, there was no reason for them to not to raise any invoice accordingly and make appropriate entries in their records. Thus, the appellant has cleared the goods clandestinely but has not been able to substantiate their claim that the goods were rejects or of substandard nature. Penalty u/s 11AC - Held that:- There is no ground to reduce the penalty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order-in-Original dated 13.06.2005 (i) confirmed the demand of ₹ 11,87,162/- under section 11A of Central Excise Act, 1944 (ii) confirmed the demand for interest on the duty demanded as per section 11 AB, (iii) imposed a penalty equivalent to the confirmed duty under section 11 AC, (iv) imposed a penalty of ₹ 2.00 lakhs on TGIL under Rule 209 of Central excise Rules 1944, Rule 25 of Central Excise Rules 2001 and Rule 25 of Central Excise Rules 2002 for contravention of the provisions of Central Excise Act 1944 and (v) imposed a penalty of ₹ 50,000/- on Shri S.S.R. Kishen, MD, TGIL under Rule 209A of Central Excise Rules, 1944, Rule 26 of Central Excise Rules, 2001 and Rule 26 of Central Excise Rules 2002. Aggrieved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount already paid is eligible for appropriation against the confirmation. Therefore, the amount of ₹ 2,30,306/- be imposed as penalty and not ₹ 1,65,795/-. Both these appeals were decided by the first appellate authority in the impugned order, rejecting the appeal of the appellant and allowing the appeal of the Department as well as that of Shri S.S.R. Kishen. The appeal of Shri S.S.R. Kishen, Managing Director of TGIL was decided by setting aside the personal penalty imposed by the lower authority on the ground that he was only working for the appellant firm and the vicarious liability cannot be cast on him unless it is established that he was a party of the said offence. There is no departmental appeal against setting aside o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 83/- per Kg as these goods were rejects. He argued that the department did not establish that they cleared prime quality goods. Alternatively, he submits that they have not collected central excise duty separately and thus they are entitled to the cum duty benefit which has not been extended to them. As they had paid an amount of ₹ 64,511/- in September 2004, there is no scope to impose penalty on this amount, therefore if a penalty is to be imposed, it should be restricted to the amount confirmed other than the amount already paid. They relied on the case law of Coimbatore Polytex Pvt. Ltd. vs. CCE, Coimbatore [2015(316)ELT 321 (Tri.-Chennai)]. 4. Ld. DR reiterates the findings of the impugned order and asserts that the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the records. Following issues have to be decided- (a) Whether the appellant has clandestinely removed the goods, (b) If so, they are liable to pay duty on them treating them as normal goods or treating them as substandard goods, (c) Whether the penalty under section 11AC needs to be imposed , (d) If so, whether the amount already paid by them during the course of investigation needs to be deducted from the differential duty payable for the purpose of imposition of penalty. 6. The show cause notice alleges that they have cleared the goods without raising invoices clandestinely and presumes that the goods which they have cleared are similar to the goods which they would otherwise have cleared. The appellant relied on a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of duty to be levied has already been revised by the lower authority in the denovo proceedings and by the first appellate authority giving the benefit of exemption available where the raw material used is only indigenous. On the question of amount of duty to be confirmed, we find any amount paid by the appellate during investigation as duty also needs to be confirmed and appropriated against the entire amount of duty confirmed. Therefore, the first appellate authority was correct in revising the confirmed amount of duty from ₹ 1,65,795/- to ₹ 2,30,306/- and appropriating the duty which they have deposited at the time of investigation. However, we find force in the argument of the appellant that the duty needs to be recom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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