Custom, Excise & Service Tax Tribunal
Ashu Bhardwaj vs Bhavnagar on 12 April, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST ZONAL BENCH : AHMEDABAD
REGIONAL BENCH - COURT NO. 3
EXCISE Appeal No. 10202 of 2019-SM
[Arising out of Order-in-Original/Appeal No BHV-EXCUS-000-APP-218-219-2018-19 dated
20.08.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs
and Service Tax-RAJKOT (Appeal)]
Ashu Bhardwaj .... Appellant
Ex- Partner Of Ms Shree Ram Ispat
D-51 Ramnagar Kaliyabid, BHAVNAGAR
GUJARAT-364002
VERSUS
Commissioner of Central Excise & ST, Rajkot .... Respondent
Plot No.6776/B-1...Siddhi Sadan, Narayan Upadhyay Marg, Beside Gandhi Clinic, Near Parimial Chowk, Bhavnagar, Gujarat-364001 WITH EXCISE Appeal No. 10253 of 2019-SM [Arising out of Order-in-Original/Appeal No BHV-EXCUS-000-APP-218-219-2018-19 dated 20.08.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-RAJKOT (Appeal)] Himanshubhai Nandlal Jagani .... Appellant 38, Vihar Complex, Fourth Floor, Near Sahakari Hat,, Waghawadi Road, Waghawadi Road, Waghawadi Road Waghawadi Road, BHAVNAGAR, GUJARAT-364001 VERSUS Commissioner of Central Excise & ST, Rajkot .... Respondent Plot No.6776/B-1...Siddhi Sadan, Narayan Upadhyay Marg, Beside Gandhi Clinic, Near Parimial Chowk, Bhavnagar, Gujarat-364001 APPEARANCE :
Shri Sarju Mehta, Chartered Accountant, for the Appellant Shri G.Kirupanandan, Supdt (AR) for the Respondent CORAM: HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) 2 EXCISE Appeal No. 10202, 10253 of 2019-SM DATE OF HEARING : 06.01.2022 DATE OF DECISION : 12.04.2022 FINAL ORDER NO. A/10335-10336 / 2022 RAMESH NAIR :
These appeals were filed by Shri Ashu Bhardwaj and Shri Himanshu Nandlal Jagani against whom, the adjudicating authority imposed penalty underRule26 for an amount of Rs. One lakhs each. Since in both these appeals challenge is to the findings in the same Order-in-Appeal No. BHV- EXCUS-OOO-APP-218 to 219-2018-19 dated 20.08.2018, they are being disposed of by a common order.
2. The brief fact of the case is that the officers of Central Excise conducted a coordinated search at the places of various brokers and transporters from where incriminating documents like various diaries, file, loose paper etc., were recovered. Further, searches were also conducted at the premises of re-rolling units and certain furnace units. Statements of Appellants recorded and entries recorded in the notebook/dairies retrieved during the course of investigation revealed the manufacture of excisable goods viz. MS Round /TMT Bars and clearances thereof to buyers which were made against cash transactions. Shri Himanshu Nandlal Jagani explained the code used by them and the transaction recorded in the said notebooks/ diaries. Shri Ashu Bhardwaj being partner of M/s Shri Ram Ispat in his statement dated 28.06.2013 and 21.09.2015 stated that the goods had been removed without payment of Central Excise Duty and without issuance of invoices and payments were received in cash. He also admitted the receipts of cash from the receiver of goods and also amount given in cash to the suppliers of goods. After thorough investigation, a show cause notice dated 20-2-2016 was issued, proposing demand of Central Excise Duty along with penalty from M/s Shree Ram Isapt and penalty under Rule 26 of Central 3 EXCISE Appeal No. 10202, 10253 of 2019-SM Excise Rules 2002 on both Appellants. By the order-in-original dated31.03.2017, the Adjudicating authority confirmed the demand of duty along with interest and also imposed penalty. In addition, he also imposed penalty of Rs. 1 each on both the Appellants. Aggrieved by the said order, appellants filed appeal before the Commissioner (A), and Commissioner (A) upheld the Order-in-Original and rejected the appeal filed by the appellants.
Hence, the present appeals.
3. Shri Sarju Mehta, Learned Chartered Accountant appeared on behalf of both the Appellants. As regard the Appeal of Appellant shri Ashu Bardwaj, he submits that when the partnership firm itself is penalized, separate penalties cannot be imposed on the partners of that firm. He placed reliance on the decision of Hon'ble High Court in the case of Pravin N. Shah reported in 2014(305) ELT 480 (Guj.) and decision of division bench of Gujrat High Court in Commissioner of Central Excise vs. Jai Prakash Motwani 2010(258) ELT 204 (Guj.).
4. He also submits that in case of Shri Atul Bansal, Director of M/s Bansal Castings Pvt. Ltd., Sihor in Appeal No. E/12133/2018, this Hon'ble Bench allowed the appeal filed by Shri Atul Bansal and set aside the penalty imposed on the appellant vide order No. A/11554-11556/2019 dated 21.08.2019. The present appeal is also based on the investigation conducted by the department from the records seized from the office premises of Shri Himanshubhai Jagani. Therefore the present appeal may also be allowed by setting aside the penalty
5. As regard the appeal of Shri Hiamanshu Nandlal Jagani, he submits that appellant had neither purchased nor dealt with the alleged goods, that the appellant acted as broker only, therefore the appellant is not liable for 4 EXCISE Appeal No. 10202, 10253 of 2019-SM penalty under Rules 26. In similar case of the Appellant, the Hon'ble Bench allowed the appeal filed by appellant and set aside the penalty imposed on the Appellant vide Order No. A/11554-11556/2019 dated 23.07.2019. Therefore the present appeal may also be allowed by setting aside the penalty imposed on appellant. Recently, also the Hon'ble CESTAT allowed the appeal filed by Appellant in another case vide Order No. A/12258/2021 dated 17.06.2021.
4 On the other hand, Shri G.Kirupanandan, learned Superintendent (AR) appearing for the Revenue reiterates the findings of the impugned order and as regard the appeal of Shri Hiamanshu Nandlal Jagani submit that it is undisputed facts in this case is that the appellant was broker dealing with the CTD bars, flats/patti/patta, etc. During the search conducted in his premises on 12.09.2012, incriminating documents in the forms of note books were seized from his possession. These seized documents contained among other things, details of the goods purchased from M/s Shree Ram Ispat without cover of central excise invoice and without payment of duty. These facts were also admitted by Shri Ashu Bhardwaj in statement. Therefore, it is proved that the appellant had acquired and concerned transporting, removing, selling and purchasing of the excisable goods which he knew or has reason to believe are liable to confiscation under the Central Excise Act, 1944 or rules made thereunder. Therefore, he rendered himself liable for penalty under Rule 26(1) of CER, 2002 and personal penalty of Rs. 1,00,000/- was rightly imposed on him. He also placed reliance on the following decision:-
(i) Om Prakash Agarwal Vs CCE, Raipur - 2017(346) ELT 125 (Tri. Del)
(ii) Haryana Steel and Alloys Ltd. Vs CCE, New Delhi -2017 (355) ELT 451 (Tri. Del) 5 EXCISE Appeal No. 10202, 10253 of 2019-SM
5. He also submits that Final orders No. A/11554-11556/2019 dated 21.08.2018 and Final Order No. A/12258/2021 dated 17.06.2021 of this Hon'ble Tribunal are not applicable in this case and same is distinguishable because in these cases the manufacturer has contested the third party evidences produced by the revenue. Further, there was no admission of any commission and omission by the manufacturer viz., M/s Bansal Castings Pvt. Ltd. The Cross Examination sought by the manufacturer was also not granted. However in the present case, the manufacturer viz., M/s Shree Ram Ispat have not disputed the third party evidences viz., diaries, notes, chits etc. recovered from the brokers. Further the main noticee viz., M/s Shree Ram Ispat have not filed any appeal against the OIO dated 31.03.2017., under which demand of Central Excise Duty was confirmed & penalty was imposed under Rule 25 of the CER, 2002
6. I have considered the submissions made by both the sides and perused the records.
7. On perusal of the records, as regard the Appeal of Shri Himanshu Nandlal Jagani (Appellant), I find that both the adjudicating authority has considered the entire records and evidences as is against the appellant and imposed the penalty. I find that there is confessional statement of Appellant, the entire clandestine activity was also supported by the transactions recorded in records which were recovered from appellant. Further the Manufacturer, M/s Shree Ram Isapt also not disputed the demand of central excise duty involving the role of appellant in this matter. I also agree with the argument of Ld. AR that ratio of final order dated 21.08.2018 and dated 17.06.2021 not applicable in the present matter. On the face of such evidence, I have to hold that penalty provisions were 6 EXCISE Appeal No. 10202, 10253 of 2019-SM correctly invoked to impose penalty on him. We do not find any reason to set aside such a reasoned orders for the imposition of penalty. However, the appellant being an individual considering the overall facts of this case, I reduce the penalty imposed on the appellant to Rs. 50,000/-.
8. As regard the Appeal of Shri Ashu Bhardwaj, Partner of M/s Shree Ram Ispat, we find that the Ld. Adjudicating authority in impugned order-in- appeal described the role of Appellant and had observed that the Appellant was engaged in clandestine removals of the goods as partner of M/s Shree Ram Ispat and facts of this case very clearly establish that he was the key person and was responsible for clandestine removal of the goods manufactured by M/s Shree Ram Ispat. He, as a partner, was looking after day-to-day affairs of M/s Shree Ram Ispat and had concerned himself in various irregular activities related to excisable goods including manufacture, storage, removal etc of such goods. In the present case, the Adjudicating authority had given the detailed finding on the role of the partner. However, considering the overall facts of this case penalty imposed on the Appellant is reduced to Rs. 50,000/-.
9. Both the appeals filed by the Appellants are partly allowed in the above terms.
(Pronounced in the open court on 12.04.2022) (Ramesh Nair) Member (Judicial) KL