Customs, Excise and Gold Tribunal - Delhi
La Chem Pharmaceuticals (P) Ltd. And ... vs Commissioner Of Central Excise, ... on 3 July, 2001
Equivalent citations: 2001(134)ELT794(TRI-DEL)
ORDER Lajja Ram, Member (T)
1. These are two appeals filed by (1) M/s. La chem Pharmaceuticals (P) Ltd. and (2) Shri S.S. Nandwana, Managing Director. The Commissioner of Central Excise, Delhi who had adjudicated the matter and disallowed the MODVAT credit of Rs. 19,88,497/- and an equal amount of penalty/ had been imposed on M/s. La Chem Pharmaceuticals (P) Ltd. under Rule 173Q of Central Excise Rules, 1944 and penalty of Rs. 1 lakh is imposed on Shri S.S. Nandwana, Managing Director under Rule 209A. Aruging for both the appellants, Shri V.R. Sethi learned Advocate submits that on merits the appellants were not contesting and the duty imposed has already been deposited. It is his submission, that even under Section 11AB of the Central Excise Act, if, duty is deposited prior to the show cause notice or within one month from the date of order, a lenient view was to be taken and penalty amount should be reduced to 25%. It was his submission that the present case, the penalty has been imposed under Rule 173Q of the Central Excise Rules. He also submits that Managing Director had also deposited the amount equivalent to 25%. The penalty amount equivalent to 25% alongwith interest had also been deposited by the Company.
2. In reply, Shri Rajeev Tandon learned SDR submits that it was the case of floating fictitious Firms, wrongly availing the MODVAT credit on the basis of fake/fogus documents and this fact had been admitted by Shri S.S. Nandwana, Managing Director, when his initial statement was recorded. He submits that there is no ground for any leniency.
3. We have carefully considered the submissions made by both the sides and have gone through the records. It is seen from the order in original that in addition to certain other irregularities, the appellants have availed wrong MODVAT credit amounting to Rs.19,88,497/- on the basis of fake/bogus documents issued by four fictitious Firms created by Shri S.S. Nandwana, Managing Director of the Company through his employees and the Firms were not in existence. Managing Director had admitted their mistake and had voluntarily debited an amount of Rs.19,62,097.50.
4. The role of the Managing Director has been discussed in Para-21 of the impugned order.
5. Keeping in view of the serious allegations which have been established against both the appellants, we consider that penal action has been rightly taken against both of them. However, taking not of the fact that the appellants had admitted their mistake and had voluntarily paid the disputed amount, we reduce the amount of penalty imposed on M/s. La Chem Pharmaceuticals (P) Ltd. from Rs.19,88,497/- to Rs. 10 lakhs (Rupees ten lakhs only). The penalty imposed on Shri S.S. Nandwana, Managing Director is reduced from Rs. 1 lakh to Rs. 50,000/-(Rupees Fifty thousand only). The demand of duty has not been contested by the appellants and that part of the order is confirmed.
6. Subject to the above reduction/in amounts of penalty, both the appeals are otherwise rejected.