Customs, Excise and Gold Tribunal - Ahmedabad
Moontex Dyeing And Printing Works, Shri ... vs Cce on 13 March, 2007
Equivalent citations: 2007(119)ECC185, 2007ECR185(TRI.-AHMEDABAD), 2007(215)ELT46(TRI-AHMD)
ORDER M.V. Ravindran, Member (J)
1. These 2 appeals are directed against Order-in-Appeal dated 9.1.2004 which upheld the Order-in-Original vide which demand of duty was confirmed, penalties imposed on the appellant firm and its partner and ordered for interest on the duty.
2. The relevant facts that arise for consideration are that the appellant firm was engaged in the manufacture of MMF(P) falling under Chapter 54 of the Schedule to the Central Excise Tariff Act, 1985. On a surprise visit of the officers to the premises of the appellant on 21.8.97, the officers found shortage of MMF (P) than the recorded balance in the lot register and the grey challan. Detailed enquiry was conducted and on completion of investigation, show cause notice was issued to the appellants to show cause as to why duty should not be demanded on processed MMF (P) cleared clandestinely and penalty should not be imposed under the provision of Section 11AC on the firm and under Rule 209A on the partner of the company. The adjudicating authority on a detailed findings, vide Order-in-original dated 13.3.2003 (received by the appellants on 31.3.2003) confirmed the demand, imposed equivalent penalty on the firm and penalty of Rs. 1.25 lakhs on the partner of the firm. On appeal, the Commissioner (Appeals) also upheld the order and dismissed the appeals filed by the appellants.
3. Learned Advocate appearing on behalf of the appellants sought to assail the order of the Commissioner (Appeals) on two grounds. It is his submission that the learned Commissioner (Appeals) has not considered the fact that the demand has been worked out by the Revenue based on private records and, as such private records cannot be considered as statutory record, and hence, demand is not correctly worked out. It is also his submission that the submissions recorded of the partner and the authorized signatory on the date of visit was retracted by them in an affidavit and the said retraction was informed to the adjudicating authority when they filed reply to the show cause notice in June, 2002. He submits that the imposition of equivalent penalty on the firm has been upheld by the Commissioner (Appeals) despite the fact that the appellants had deposited the entire amount of duty, interest thereon and 25% of the penalty within 30 days of the receipt of Order-in-Original. It is his submission that having discharged the duty liability, interest and 25% of the penalty, the appellant firm is entitled for reduction of penalty. As regards the personal penalty imposed on the partner of the firm it is his submission that the partner should not have been penalized as there is no separate identity of the partner from the partnership firm. He relies upon the decision of the Tribunal in the case of Kamdeep Marketing Pvt. Ltd. v. CCE, Indore, as reported at and, in the case of Harish Dye. & Ptg. Works v. CCE&C, Surat-I, as reported at 2001 (138) ELT 772 (Tri.-Mumbai).
4. Learned SDR on the other hand submits that, the appellants had admitted the clandestine removal of the processed MMF (P) which has been corroborated by the Revenue from the recipient of such clandestinely removed goods. It is his submission that the penalty on the partner is sustainable as he has been the man behind the whole exercise of clearing the finished goods without payment of duty.
5. Considered the submissions made at length by both sides and perused the record. Learned Commissioner (Appeals) has come to the conclusion that the appellants had removed the excisable goods without accounting in RG-1 register in illicit manner to evade payment of duty. The said findings are as under:
6. I have carefully examined the case records and have considered the submissions made by the appellants. "I find that there is a case of illicit removal of excisable goods and non accountal in the RG-1 register and Shri Manaharlal Ratilal Bachkaniwala, Partner of the appellant have categorically admitted the offence committed under C.Ex law in his statement recorded on 22.8.97 under Section 14 of CEA, 1944 and he had never retracted his statement till the issue of SCN. The adjudicating authority has relied upon the judgment of Naresh Sukwani v. UOI reported in 1996(83) ELT. 258(T). The panchnama have also been drawn at the premises of the appellant in presence of two independent panchas. I find that there are sufficient evidences in respect of alleged evasion of duty and the adjudicating authority have correctly passed the order that C.Ex duty amounting to Rs. 5,39,937/- leviable on illicitly removed MMF(P) admeasuring 177482 L.Mtrs valued at Rs. 2699686/- under Section 11A(1) of CEA, 1944 and imposed a penalty of Rs. 5,39,937/- on the appellant under Rule 173Q(1) of erstwhile CER, 1944 read with Section 11AC of CEA, 1944.
7. The appellant have contended that in absence of cogent evidence the action of clandestine removal is not sustainable. I find that the appellants have admitted their offence in their statements recorded on different dates under Section 14 of C. Ex. Act, 1944, The facts have also been admitted by the proprietor/authorised signatory/partners of the firms who were dealing in purchasing/selling grey fabrics and recipients of the finished MMF(P) in their statements recorded on different dates under Section 14 of C. Ex. Act, 1944 and they had never retracted their statement. I find that there are sufficient evidence in respect of alleged evasion of duty/clandestine removal of the goods and the adjudicating authority have correctly passed the order.
6. I find that the appellant has not brought on record any evidence to indicate that the recipient of the goods were not, in fact, recipient of the goods. It is the submission of the learned Advocate that out of 40 recipients of the goods only 16 peoples statements as regards the receipt of the clandestinely removed goods, would not indicate anything in support of the appellants' case. If 16 different recipients of the clandestinely removed goods voluntarily gave the statements to the authorities under Section 14, there is no reason for disbelieving such statements. Hence, I do not find any merit in the appeals of the appellants as regards findings of the clandestinely removed goods. Appeal to that extent is dismissed.
7. As regards penalty on the firm under Section 11AC, I find that the first proviso to Section 11AC reads as under:
Provided that where such duty as determined under Sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the duty so determined:
It can be seen from the above reproduced first proviso to Section 11AC that if the assessee deposit the entire amount of duty, interest and 25% of the penalty the balance amount of penalty imposed by the authorities need not be saddled upon the appellants. I find strong force in the contention of the advocate that the balance amount of duty Rs. 4,04,937/- is not payable as the appellants have produced evidence of payment of the entire amount of duty as confirmed, and interest thereon along with 25% of the amount of penalty on 29.4.2003 i.e. within 30 days as mandated by the first proviso to Section 11AC. In view of this, the balance amount of penalty (75%) imposed on the appellant firm is set aside and the appeal to that extent is allowed.
8. As regards the personal penalty imposed on the partner of the firm I find that the penalty has been imposed under proviso to Rule 209A of the Central Excise Rules, 1944. The Division Bench of the Tribunal in the case of Kamdeep Marketing Pvt. Ltd. (supra) as held as under:
Personal penalty on partners/proprietor in addition to the firm not imposable - Rule 209A of erstwhile Central Excise Rules, 1944 - Rule 26 of Central Excise Rules, 2002.
Further, I find that the Tribunal in the case of Harish Dyeing & Printing Works (supra) has held as under:
Penalty on partner not leviable - Assessee being a partnership firm, not different from its partner - Separate penalty not imposable on the partner under erstwhile Rule 209A of the Central Excise Rules, 1944.
Respectfully following the above decisions of the Tribunal, I have to hold that the Partner of the firm is not different from the partnership firm, and hence, penalty on the partner in this case is liable to be set aside and, I do so.
9. Accordingly, appeals of the appellants are allowed as indicated in the above paragraphs.
(Dictated & pronounced in the Open Court.)