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TMI Blog2005 (8) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... red in the name of the said five units were actually manufactured and cleared by M/s. Bremels Rubbers only) M/s. Bremels Rubbers and its Managing Director had emphatically denied the same. On perusal of the connected documents, I find that the above allegation against M/s. Bremels Rubbers was primarily on the ground that (a) the proprietors of most of the five units in question were its employees/ex-employees; (b) Shri N. Vishwanath its employee had assisted the said five units in procuring the raw materials (c) its vehicles were used for transporting the said raw materials (d) the said five units were its group of companies because of a letter dated 2-4-87 written by Shri B.R. Shetty to Shri P.K. Joseph taking personal responsibility up to a limit of Rs. 5 lakhs on credit of supplies made to M/s. Bremels Rubbers and other ancillary units (e) As per the statements of some of the proprietors of the said units and the owner of the industrial shed. The apt question that arises here is whether the above grounds are sufficient to hold that the goods in question were actually manufactured and cleared clandestinely by M/s. Bremels Rubbers. There is nothing on record to show that the raw m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t they were not owning any rubber factory but had signed some blank papers as directed by Shri B.R. Shetty of M/s. Bremels Rubbers had not let in any evidence to substantiate their contentions. The other grounds such as lending of the vehicles for transportation of raw materials, assisting in procuring raw materials the proprietors were the employees of M/s. Bremels Rubbers etc. are not sufficient to hold that M/s. Bremels Rubbers were the actual manufacturers of the disputed quantum of tread rubber, in- asmuch as such mutual help among the industries is quite common. Regarding the other evidences relied upon viz., a letter dated 2-4-87 (written by Shri B.R. Shetty to Shri P.K. Joseph taking personal responsibility up to a limit of Rs. 5 lakhs in credit for supplies made to M/s. Bremels and other ancillary units) M/s. Bremels Rubber in their reply dated 11-9-91 to the show cause notice dated 14-5-91/3-6-9l (issued to them on identical issue) had contended that the terms "Bremels and other ancillary units" meant only M/s. Bremels Rubber, M/s. Aditlok Investments (P) Ltd. and M/s. Biyer Rubber (P) Ltd. In my considered view a Managing Director of a Company, standing as a guarantor in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of penalty I have already held in my findings supra that penalty under the provisions of Rule 209A of the Central Excise Rules, 1944 is imposable on the proprietors of the said units. No penalty under Rule 173Q of the CER, 1944 is imposable on M/s. Bremels Rubber as the allegations made against them in the show cause notice were not proved as explained in detail in the foregoing paras. As regards the imposition of penalty against Shri B.R. Shetty, I find that he had been contending consistently from the beginning that he had not committed any offence, which renders him to liable for penalty under Rule 209A of the CER, 1944. Further, Shri B.R. Shetty is no more alive, Hon'ble Tribunal in the case reported in 1996 (85) E.L.T. 121 (Trib) has held that penalty cannot be imposed after the death of the accused. In view of this ruling, the question of imposition of penalty on Shri B.R. Shetty does not arise. The same is the case in respect of Late Shri J. Thimme Gowda. S/Shri M.C. Mariappa and J. Narayana Gowda who were the owners of the impugned industrial shed were alleged to have aided/abetted or concerned in the clandestine manufacture and clearance of tread rubber by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such dealings were in no way different from their dealings with their other customers in the normal course of their business. There is also nothing on record to show that the dealing between them were beyond that of the dealer and customer. Hence, imposition of penalty under Rule 209A on the said persons is not called for. As regards the proposal for imposition of penalty on Shri N. Vishwanath, I find that no statement had been recorded from Shri N. Vishwanath nor was there any specific mention in the show cause notice about the nature of contravention or violation by him. Shri N. Vishwanath in his reply dated 9-10-91 to the show cause notice had contended inter alia that he had assisted some of the units in Peenya in procuring raw materials and their transportation using his acquaintance with some of the dealers in order to keep good neighbourly relationship. I find that there is nothing on record to show the involvement of Shri N. Vishwanath in the clandestine manufacture and clearance of excisable goods by any of the units. Hence, the question of imposition of penalty on Shri N. Vishwanath does not arise. Taking into consideration the above detailed discussion I pass the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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