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TMI Blog2019 (5) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Apparels Private Limited but reduced the penalties on Sh. Srikanth Thirunakara and Sh. Sridhar Thirunakara, Directors of the appellants to Rs. 50,000/- each under Rule 26 of the Central Excise Rules, 2002. Since all the three appeals arising out of the common impugned order therefore all the three appeals are being taken together for discussion and disposal. 2. Briefly the facts of the present case are that the appellant is a company incorporated under the provisions of the Companies Act with Sh. Srikanth Thirunakara and Sh. Sridhar Thirunakara as Directors. They were engaged in the manufacture and clearance of excisable goods viz. Bags and Soft Luggage items falling under Chapter S.H 42021290 of the First Schedule to the Central Tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise, GST, Bangalore as to why: (a) Central Excise Duty amounting to Rs. 3,38,399/- on the seized goods should not be demanded and recovered from them under Section 11A(4) of CEA; (b) Central Excise Duty amounting to Rs. 1,73,625/- on the excisable goods removed without payment of duty under the cover of delivery challans should not be demanded and recovered from them under Section 11A(4) of CEA; (c) Interest at appropriate rate as prescribed under Section 11AA of CEA should not be demanded on the amount mentioned (a) above; (d) Penalty should not be imposed on them under Section 11AC of CEA/Rule 25 of Central Excise Rules for non-payment of Central Excise Duty with wilful intent to evade payment of duty. 2.1. After co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration of the facts and submissions put forth during the course of investigation and proceedings before the lower authorities. He further submitted that the appellants had accounted the relevant transactions in their books and had moved goods under the cover of documents such as delivery challans. He further submitted that with regard to 1806 Nos of bags seized during the course of the investigation on the ground that the same had not been accounted in the statutory records with intent to clear without payment of duty, the said findings are totally unsubstantiated. He further submitted that the stand of the appellant before the Original Authority was that the goods in question had been manufactured in the appellants' Nelamangala pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing made to clear without payment of duty, duty on goods lying unaccounted cannot be demanded. He also placed reliance on the following case laws: * Commissioner of C.Ex., Aurangabad v. GAL Aluminium Extrusions Pvt. Ltd. [2011 (274) ELT 582 (Tri. Mumbai)]. * Mittal Corp. Ltd. v. Commissioner of C.Ex. & S.T., Indore [2018 (364) ELT 803 (Tri. Del.). 4.1. It is his further submission that as on date also the goods seized during the investigation are lying in the appellants' premises and GST as applicable would be paid as and when the same are cleared for sale. Further, as regards the demand of Rs. 1,73,625/- on 1479 Nos of bags, the Learned Counsel submitted that the said goods were manufactured by group entity by name M/s 3rd Stitch App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- each under Rule 26 of the Central Excise Rules, the Learned Counsel submitted that the requirement as envisaged under Rule 26 of the Central Excise Rules, 2002 for imposing the penalty on the Directors is not satisfied in the present case. Further, there is no evidence in the present case that the Directors in their individual capacity were guilty of any of the omissions and commissions mentioned in the Rule. For this submission, he placed reliance on the decision of CESTAT rendered in the case of Vimlachal Print & Pack Pvt. Ltd. v. Commissioner of C.Ex., Ahmedabad-II [2017 (6) GSTL 496 (Tri. Ahmd.) wherein it was held that when no specific role of Director pointed out, there is no reason to impose penalty under Rule 26 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Maghan Paper Mukks cited supra, it has been consistently held that in the absence of any evidence to show that the attempts were being made to clear the goods without payment of duty, duty on goods lying unaccounted cannot be demanded therefore the demand of duty to the extent of Rs. 3,38,399/- is set aside. With regard to the demand of Rs. 1,73,625/- on 1479 Nos of bags, the appellant during the pendency of this appeal had paid the duty of Rs. 1,73,625/- along with interest of Rs. 1,01,423/- and the proof of payment is also produced on record. Therefore, in view of the said payment of duty, I hold that the appellant could not prove by cogent and convincing evidence that they were not clandestinely removing the said goods therefore the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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