4.Whether Order Is To Be Circulated To ... vs Cce, Delhi-I on 6 August, 2010
3.1 Shri Krishna Kant, Advocate, the learned Counsel for the Appellants pleaded that there are no allegations in the show cause notice that the Appellants handled or dealt with the goods manufactured and cleared by AJP and hence penalty under Rule 209A of Central Excise Rules,1944/Rules 26 of Central Excise Rules,2001/2002 is not attracted; that penalties imposed on the Appellants are joint penalties under Rule 209 & 209A of Central Excise Rules, 1944/Rule 25 & 26 of Central Excise Rules, 2001/2002, which are not sustainable and in this regard, reliance is placed o Tribunals judgments in cases of Singam Mark & Co. vs CCE, Salem reported in 2005 (189) ELT.111; Panetrical Engg. Vs CCE, Mumbai-V reported in 2005 (186) ELT.120 and Indsil Industries Ltd. vs CCE, Coimbatore reported in 2005(188)ELT.195; that other than the statements of Shri M.K. Gautam, there is no other independent evidence indicating that the Gargs were controlling AJP; that Shri Gautam had retracted his Ist statement dt.26.4.02, that this statement had been recorded under duress; that a FIR had been filed lodged by Shri Gautam before Police on 26.4.2002 complaining that he had been beaten up and alongwith the FIR, a medical report from Lok Nayak Hospital, New Delhi had been submitted; that statement dt.26.4.02 of Shri Gautam was not his voluntary statement; that Shri Vinod Bansal in his seven statements has nowhere stated that the Gargs were the real persons behind AJP; that Gargs were manufacturing Gutka only upto 1995-96 and since then, they have been only allowing the use of their brand names for royalty, that Gargs had no control on AJP; that it is Shri M.K. Gautam who was running AJP and was signing all the returns like monthly ER-1 return, income tax return; that in absence of any independent corroborative evidence, Shri M.K. Gautams statements have no evidence value; that it is settled law that a retracted statement is of no evidence value unless corroborated by independent evidence; that when duty demand is against AJP, no penalty can be imposed on Gargs who had no connection with AJP; that as per Commissioners finding in para 178 & 179 of the order-in-original, it is Shri Vinod Bansal who was the main person involved in the duty evasion; that no enquiry has been conducted with the buyers of gutka/pan masala; that the loans provided to AJP by some companies, some of which are owned by Gargs, have been paid by AJP; that there is no finding in the impugned order that Gargs physically dealt with the goods clandestinely cleared by AJP and therefore, no penalty can be imposed on them under Rule 209A of Central Excise Rules,1944/Rule 26 of Central Excise Rules,2001/2002; that in this regard, reliance is placed on Tribunals decisions in cases of Kamdeep Marketing Pvt. Ltd. vs CCE, Indore reported in 2004 (165) ELT.206 and A.M. Kulkarni vs CCE, Aurangabad reported in 2003 (56) RLT. 573, that the quantum of duty demand against AJP is based only on the basis that each of the 20 machines installed in AJPs premises could produce 200 pouches of 2 gms. each per minute and the factory worked in one shift of 8 hours daily for 25 days in a month; that there is no evidence regarding the quantity of raw-material purchased or the quantum or value of the goods sold, and that in view of this, there is no justification for imposition of penalty on Gargs i.e. Shri D.D. Garg, Shri R.K. Garg and Shri S.K. Garg.