Customs, Excise and Gold Tribunal - Mumbai
Shri Rajesh Harilal Gandhi And Shri ... vs Commissioner Of Central Excise on 14 March, 2005
ORDER T. Anjaneyulu, Member (J)
1. A common order in these appeals is being passed after hearing Shri Rajesh Harilal Gandhi appearing in person and Shri M.V. Ravindran for other appellant and the Id. D.R. Shri S.S. Bhagat for the Revenue.
2. The issue in these two appeals is the penalty imposed under Rule 209A .
3. These two appellants had dealing with M/s. Krishna Plastochem Ltd. (KPL), who are manufacturers of acid and they were buying certain quantity of Oxalic Acid on cash transaction basis from M/s. KPL. The factory premises of M/s. KPL and also the premises of the appellants were searched by the Central Excise authorities and 13 bags totally weighing 650 kgs. of Oxalic Acid were detained, which were subsequently released on 17.04.98 after verification. A Show Cause Notice was issued inter alia to the appellants after completion of enquiry, asking them to show cause why penalty should not be imposed on them.
4. The Commissioner, after considering the submission and the material on record, confirmed the demand of duty on M/s. KPL and imposed penalty of Rs.1,50,000/- on Shri Mukund Chimanlal Doshi, Proprietor of M/s. Kalpana Chemicals, and Rs. 5,00,000/- on Shri Rajesh Harilal Gandhi, Proprietor of M-3 Co., under Rule 209A.
5. Purchase receipts/in voices from other traders were produced. However, based on the warehouse records that goods had come from M/s KPL, while nothing in the statement exists to indicate the basis for that knowledge is forthcoming, was relied by the Department. It is contended that the amounts for procurement of Oxalic Acid has been paid by cheque at the prevailing market price and this material has been discarded.
6. Relying upon the decision in the case of Commissioner of Central Excise, Guntur v. Computer Connection and Bellary Steels & Alloys Ltd. v. Commissioner of Central Excise, Belgaum and on finding that there is no knowledge, which can be ascribed on part of the appellants for the penalties under Rules 209A, the same have to be determined in view of the totality of the circumstances and when it is found that Shri Rajesh Gandhi is the proprietor used to purchase Oxalic Acid from KPL and reselling in Surat and the adjudicator has found his liability for penalty to be on par with that of the Managing Director of KPL, his role being equated to that of Managing Director of M/s. KPL without any cogent reason to do so to the penalty on the purchase of goods, should be kept at a level lower and not equivalent to the liability of the Managing Director of the assessee company. We cannot uphold the penalty to be imposed on Shri Rajesh Harilal Gandi, the appellant before us, at the level and equal to the penalty imposed on the Managing Director i.e. Rs.5,00,000/ under Rule 209A. We would reduce the same to Rs. 50,000/- under Rule 209A.
7. As regards Shri Mukund Chimanlal Doshi, after considering the role of this appellant as on record, the request to reduce the penalty imposed on him under Rule 209A in the facts and circumstances of this case cannot be acceptable. As he is proprietor of M/s. Kalpana Chemicals, he is found to have indulged for storage of clandestinely removed goods.
8. Therefore, in view of the finding, the appeal of Shri Rajesh Harilal Gandhi is partially allowed by reducing his penalty and the appeal of Shri Mukund Chimanlal Doshi is rejected.
(Pronounced in Court)