Customs, Excise and Gold Tribunal - Mumbai
Banco Products (India) Ltd., V.K. ... vs Commissioner Of Central Excise And ... on 30 July, 2001
Equivalent citations: 2001(134)ELT375(TRI-MUMBAI)
ORDER
G.N. Srinivasan, Member (Judicial)
1. This appeal has been filed against the order dated 19.4.91 passed by the Collector of Central Excise and Customs, Vadodara whereunder the adjudicating authority had confirmed the demand of duty of Rs. 8,31,034. In that said order, there was confiscation of 111 numbers of radiator assembly core fixing redemption fine of Rs. 1 lakh and imposition of penalty of Rs. 50 lakhs on the assessee under Rule 173Q. The order also imposed penalty on six directors under Rule 209A of the Central Excise Rules ranging from an amount of Rs. 10 lakhs on one person (V.K. Patil) and Rs. 5 lakhs each an other directors. The plant and machinery was also ordered to be confiscated on a redemption fine of Rs. 7 lakhs.
2. The appellant is engaged in the manufacture of automobile components namely radiator assembly, radiator core, gaskets etc. of various shapes, size and varieties. It is stated by the appellant in the grounds of appeal that there are 6550 varieties in the range of products manufactured by them and all the products were identified solely and exclusively by code not only for excise purpose but also for daily factory working, costing, material planning etc. Sometime in October 1987, there was a visit of the officers of the department and an investigation was carried out. It resulted in the issue of show cause notice dated 19.4.98 wherein certain irregularities committed by the assessee appellant was indicated. The charge against the appellant was indicated in paragraph 12 of the show cause notice which inter alia stated that the radiated core bearing various numbers supplied at parties to New Delhi were of the same specification and dimension used for bus/trucks during the entire period of production and the same could not be used for any kind of tractor. In paragraph 13 of the said show cause notice the charge made was that the assessee had removed in the guise of radiator core by assigning them product code for Tata Bus/Trucks and misdeclaring the prices by resorting to undervaluation to a considerable extent. The show cause notice also refers to a statement recorded from various persons. The replies were filed. The matter was heard and the impugned order has been passed by the assessing authority in an elaborate manner running into 110 pages. In the impugned order, the adjudicating authority has held that there has been a misdeclaration, clandestine removal and the undervaluation has been done by the directors of the assessee on the basis of the statements given by them and the penalties have been imposed. Hence the present appeal by the assessee and directors.
3. Shri Gunasekaran advocate appeared for all the appellants and Shri Pardeshi, DR appeared for the department.
4. It may be noted that at the relevant time a joint appeal could be filed inasmuch as in the instant case assessee as well as the directors have filed the joint appeal and this has been entertained by the decision of the Tribunal in the case of Universal Auto vs. CCE 1991 (56) ELT 346. Ld. Counsel for the appellant argues that the approach of the Collector is wrong in law inasmuch as the penalty has been levied in a harsh way. He also stated that specific allegation has not been made in the show cause notice as to the complicity of the directors on whom penalty has been imposed under Rule 209A of the Central Excise Rules. He also tried to explain as to how on the basis of the code number has been given to each and every product manufactured which would be assigned to a particular finished product namely either tractor or the bus or the truck as the case may be. He tried to explain through the price list filed before the authority as to how the entire transactions would reveal that there was no misdeclaration or there is any undervaluation. He also tried to explain that there was no clandestine removal.
5. Ld.DR reiterates the grounds mentioned in the order.
6. We have considered the arguments of the Ld. Counsel for the appellant. We are of the view that from the documents produced before us and from the appreciation of the evidence in the case that there has been a misdeclaration. The statement of the employees referred to in paragraph 20 of the order would clearly implicate the assessee as to the mis-description and under valuation. The entire matter has been fully discussed and referred to in internal page 43 to 44 of the order. We are therefore of the view that there has been undervaluation and duty has been rightly confirmed.
7. In passing the impugned order, the adjudicating authority has drawn support from the various case law, English as well as Indian, and the cases decided by the Indian Courts and Tribunals that the misfeasance committed by the assessee but for the complicity human elements. Be that as it may, the fact remains that the show cause notice does not state the complicity of various directors. When such is the situation it is incomprehensible as to how the penalties could be imposed on the individual directors. We therefore on this score set aside the penalties imposed on each of the directors.
8. As far as the penalty imposed on the assessee namely Rs. 50 lakhs is concerned we have to state that technically and legally speaking penalty could be imposed under Rule 173Q of the Rules on the basis of the value of the goods.
9. Having regard to the facts and circumstances of the case, we feel that justice would be met if we reduce the amount and penalty to Rs. 8,50,000/- from Rs. 50 lakhs. With this above modification, appeal stands disposed of.
10. Appeal stands disposed of on the above terms.