Customs, Excise and Gold Tribunal - Delhi
M/S. Rajasthan Explosives, Shri Rajesh ... vs Cce Jaipur on 8 June, 2001
ORDER
P.S. BAJAJ
1. These stay applications arise out of appeals Nos.E/31-33 & 92/2001-NB filed by the appellant against common order in original dated 3.11.2000 passed by the Commissioner of Central Excise, Jaipur vide which he had disallowed modvat credit of Rs.30,96,349/- to the company appellant no.(1) and imposed penalty of equal amount under Rule 57-I(4) and of Rs.10 lakhs under Rule 173-Q of the Central Excise Rules, alongwith the interest on them.He also imposed penalty of Rs.20 lakhs on Managing Director of the company Shri Rajesh Jain, appellant no.(2) and of Rs.1 lakh each on Shri B.D.Agarwal, Vice President(Commercial) and Shri A.K.Jain, Vice President(Production) of the company, appellants Nos.(3) and (4) respectively. No penalty, however, has been imposed no M/s.HNPEL under Rule 173-Q(1)(bbb) of the Rules.
2. The company,appellant no.(1) was engaged in them manufacture of explosives.On 8.11.97 the Central Excise Officers visited the factory premises and resumed several incriminating documents.On examination of these document, it revealed that the company availed modvat credit in respect of 269 MTs of Bel-Gelation on the basis of invoices issued by M/S.HNHEL Sohna and also seven consignments of special ordinary/plain detonates as detained in the Annexure 'B'; to the show cause notice.It was also noticed that the impugned consignments of the inputs were not at all received at the factory premises of the company and modvat credit of the amount in question was wrongly utilised by them for payment of the duty on the final product.The show cause notice was accordingly issued to the company as well as to the other appellants being the Managing Director and the Vice President, Commercial and Production,for the recovery of the modvat amount illegally utilised and also for taking panels action.the show cause notice was also issued to Shri Ganesh Mathur of M/s.HNEPL. After getting their reply wherein the appellants controverted the allegations levelled against them in the show cause notice, the Commissioner through the impugned order disallowed the modvat credit and imposed penalty alongwith the interest on company(Appellant No.1) and also on other appellants as detailed above. No penalty, however, was imposed on Shri Ganesh Mathur, M.d. of M/S.HNEPL,Sohna.
3. Through the present stay applications the appellants have sought the complete waiver of the amounts detailed above for the purposes of hearing of their appeals.The waiver of the modvat amount disallowed and the penalties imposed in the impugned order, has been sought by the company appellant No.(1) mainly on the ground that it had already been declared sick industrial unit under the Sick Industrial (Special Provisions) act, 1985 for having gone in losses.The counsel has also referred to the Tribunal's judgment recorded in the case of Amrit Papers Vs. CCE Chandigarh 2001(128)ELT 67.
Wherein the Tribunal allowed the waiver of pre-deposit on the ground that the company got itself registered as a sick unit.He has also referred to the Apex Court judgment in the case of vijay Packaging System Ltd.Vs. CC & CCE, AP 2001(39) RLT 501 wherein it was directed by the Court to hear the appeal without pre-deposit of the duty amount as the company had gone before FIFR and had prima facie case.
4. The waiver of the pre-deposit of the penalty amounts imposed on the appellants nos.(2) to (4) who were Director, vide Presidents (Commercial) and (Production) respectively, at that time, has been sought on the ground that there was no material on the record to prove the non-receipt of the goods on which the modvat credit was taken by the company, from Shri Ganesh Mathur, M.D. of M/s. HNEPL and moreover Shri Ganesh Mathur had been let off by the Commissioner without imposing any penalty under Rule 173-Q(i)(bbb) of the central Excise Rules.
5. On the other hand, the learned SDR, has reiterated the correctness of the impugned order of the Commissioner and submitted that no prima facie case is made out in favour of any of the appellants for waiver of the pre-deposit of the amount and penalty amounts.
6. We have heard both the sides and gone through the record.
7. So far as the company appellant no.(1) is concerned, the modvat credit amount which had been disallowed and of the penalties imposed on them, deserves to be allowed as the copy of the order passed by the BIFR dated 22.11.2000, which has been placed on record, shows that the company had been declared sick industrial unit under Industrial Companies (Special Provisions) Act, 1985 and the scheme had been also sanctioned. The Tribunal in Amrit Papers case (supra)dispensed with the pre-deposit of the amount as the company was registered as suck unit under BIFR. Similarly, the Apex Court in Vijay Packaging in System Ltd.(supra) directed the Tribunal to hear the appeal of the company without pre-deposit of the duty amount as the company was already before BIFR.
8. However, no prima facie case for allowing the total waiver of the penalty amounts, to other appellants is made. They were admittedly Managing Director and vice Presidents of the company at that time.The impugned order of the commissioner that their company availed the modvat credit of the disputed amount of Rs.30,96,349/- on the basis of the invoices without receipt of the goods actually from M/s.HNEPL and its Managing Director Ganesh Mathur, cannot be prima facie said to be in any manner illegal or invalid.Non-imposition of penalty on Ganesh Mathur, Managing Director of M/s.HNEPL by the commissioner cannot itself be taken to be sufficient ground for holding that the impugned order of the Commissioner prima facie is illegal infirm or defective at this stage.
9. The equity and balance of convenience also do not appear to be in favour of the appellants nos.(2)and (4) for allowing them total waiver of the penalty amounts for the purposes of hearing of the appeals. However, keeping in view the facts and circumstances of the case,the issues involved, in our view the ends of justice would be met and the Revenue's interest would also stand safeguarded, if Rajesh Jain, appellants no.2 is directed to make a deposit of Rs.5 lakhs (Rupees five lakhs) out of the total penalty amount of Rs.20 lakhs (Rupees twenty lakhs) and the other appellants nos.(3) and (4) of Rs.50,000/0 (Rupeesd fifty thousand)each out of Rs.1 lakh (Rupees one lakh) each as imposed on them. Therefore, we order accordingly. Appellants, Shri Rajesh Jain is, accordingly directed to make deposit of Rs.5 lakhs (Rupees fifty thousand)each within a period of eight weeks from the date of receipt of copy of this order. On making these deposits, the pre-deposit of the balance penalty amounts, by these appellants shall stand waived and recovery stayed till the disposal of the appeals.But, in case these appellants failed to comply with the terms of this order within the stipulate period, then their appeals will become liable to be dismissed under section 35-F of the Central Excise Act. However, as discussed above, the company appellants no.1 is allowed waiver of the entire modavt and penalty amounts,f or the disposal o their appeal.The stay applications of all the appellants stand siposed off in the above said terms.
10. To come up for reporting compliance by appellants nos.(2) to (4) on 27/7/2001.