TMI Blog2014 (8) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside. In sum, for the period October 2002 to December 2002, we hold that the demand of the duty liability can be confirmed on the main appellant only for the quantity of man made fabrics cleared to M/s Sangam Prints, M/s Neha Prints as recorded at Paragraph No.13 of the Order-in-Original. To that extent, the appeal filed by the appellant is rejected. Lower authorities are directed to calculate the amount of duty liability on the man made fabrics of 9,33,085 LMs and 1,31,309.75 LMs cleared to these two purchasers. Appellant is also required to pay interest at appropriate rate on all these amounts of duty liabilities. Regarding penalties - Held that:- As regards the penalties we find the main appellant is to be penalized with equivalent amount of duty liability as has been worked out by the lower authorities on the clearances made to M/s Sangam Prints, M/s Neha Prints as indicated hereinabove with an option to pay 25% of the duty liability as per Section 11AC of Central Excise Act, 1944, as has been held by Hon'ble High Court of Gujarat in the case of Akash Fashions Prints Pvt.Ltd. [2009 (1) TMI 113 - GUJARAT HIGH COURT]. These our findings are based upon the fact that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons raised by the appellant and confirmed the demand of duty, interest thereof and also imposed penalties on all the appellants herein. 3. Ld.Counsels Shri J.C. Patel and Shri K.I. Vyas appeared on behalf of the appellants. Ld.Counsel, after giving us an overall view of the issue involved, submitted that the demand can be split into two parts:- i) July 2002 to September 2002 ii) October 2002 to December 2002 3.1 As regards the demand in respect of the period July 2002 to September 2002, ld.Counsel, after taking us through the various documents relied upon by the Revenue, would submit that the only basis for demanding duty for this period are on the certain figures which were mentioned for the months of July, August and September appearing at the bottom on Page No.9 of loose papers. He would draw our attention to said Page No.9. It is his submission that only the said three months are mentioned without any mention of the year, only figures are mentioned and there is no affix or suffix as to whether they are of linear Metre. Thirdly, there is no confessional statement of the appellants director in respect of these figures. It is his submission that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that similar contentions were rejected by the Tribunal in the case of Tejal Dyestuff Industries - 2007 (216) ELT 310 which has been upheld by Hon'ble High Court of Gujarat as reported at 2009 (234) ELT 242 and the same ratio was followed by this Bench in the case of Centurian Laboratories - 2013 (293) ELT 689 (Tri-Ahmd). It is his submission that apart from the said retraction, there is no evidence to show that the entire clearances which were clandestinely removed in as much as the documents which were recovered having the rubber stamp of Sangam Creations Pvt.Ltd were not mentioned in the panchnama and the panchnama itself is highly suspect as the said statement has been signed as on 9.1.03/10.1.03. It is his further submission that the Department has recorded statements of 3 alleged buyers viz. M/s Sangam Prints, M/s Neha Prints and M/s Karishma Prints (annexed at Page Nos.139 to 142 of the appeal memoranda); buyers Karishma Prints Ltd has stated that whatever goods they had purchased from the appellant were under the cover of duty paying documents. It is his submission that none of these buyers were contacted by the Revenue and nor any statements brought on record. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission that for the period October 2002 to December 2002, the demand has been worked out based upon the confessional statement of Shri Suresh Agarwal. He would draw our attention to the statement of said Shri Suresh Agarwal and submit that he has admitted that as to the details indicated against the dispatch column. It is his submission that the date-wise actual production of dyeing and printing in the factory and the difference in the clearance figures taken from the RT 12 was confirmed by Shri Suresh Agarwal by explaining the modus operandi of illicit clearances through kacha challan which was destroyed after the delivery of the goods. It is his submission that Shri Suresh Agarwal readily agree to pay the duty of ₹ 72,27,484/- involved on such clandestine removal of the goods. He would also submit that Shri G.M. Kodawala Printing Master of the main appellant, in his statement also accepted the fact that the job cards which indicated actual printing and dyeing done by the appellant were destroyed after processing of the fabrics was complete and removed from the factory. Shri Kodawala explained the modus operandi adopted by citing various instances for the entries made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the Panchnama in the afternoon of 9.1.2003 and it went on overnight till the afternoon of 10.1.2003, a fact undisputed. If that be so, the challenge of ld.Counsel as to the Panchnama being incorrect and the signatures obtained from the directors on the said Panchnama on 10.1.2003 by putting prior date is to be considered as negating the Panchnama, is totally baseless argument. 8. As regards the demand raised for the period July to September 2002, we perused the records. On perusal of the records, we find that the documents on which the Revenue relied upon to hold that these figures indicate the dispatch of unaccounted man made fabrics; said document did not indicate any affixation or suffixation on the figures which were mentioned. Ld.Counsel was correct in bringing to our notice that the said figures did not have any indicator as to whether they were fabrics or otherwise. We find that the director on being confronted with such figures in the notebook, in his statement clearly stated that the figures represent amount of dyeing and printing charges due to the main appellant. It is noted that the Revenue authorities did not further put any question to the director on the figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of M/s Sangam Prints, M/s Neha Prints have admitted and stated categorically that the main appellant had removed/sold the man made fabrics to them without preparing any duty paying documents. These confessional statements of the buyers are to be considered as evidence which is going against the appellant. As against such uncontroverted evidence, the main appellant was not able to produce any evidence in support of his claim that there was no clandestine removal made to these parties. In the absence of any such evidence before us, we find that the demand of duty liability on 9,33,085 LMs and 1,31,309.75 LMs cleared by the appellant to M/s Sangam Prints and M/s Neha Prints respectively, are to be upheld as the duty liability on the main appellant as an clandestinely removed the goods. As regards the demand of the duty liability on the clearances made to M/s Karishma Prints, we find that the official of M/s Karishma Prints has specifically stated in the statement recorded that they do not receive any goods from main appellant without duty paying documents. On the face of such clear statement from the buyers, it is not possible for us to hold that the appellant had cleared goods cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of justice will be met if Shri Suresh Kumar Agarwal is visited with a penalty of ₹ 2 lakhs (Rupees Two Lakhs only) under Rule 26 of Central Excise Rules, 1944. 14. As regards the personal penalties imposed on Shri Bharat Kumar Agarwal, director of Shri Sangam Prints, partner of M/s Sangam Prints, we find that they were the recipients/purchasers of the clandestinely removed goods and were aware of the fact that duty liability has not been discharged on the goods. Since they were aware that the goods are non duty paid, penalty under Rule 26 is imposable on them also, which in our considered view, should be in proportion to the quantity of the goods received by them. The ends of justice will be met by imposing a penalty of ₹ 1 lakh (Rupees One Lakh only) on Shri Brij Mohan Agarwal. 15. As regards the penalty imposed on M/s Neha Prints, we find that the said M/s Neha Prints was also aware that they were receiving the goods without duty paying documents from the appellant and accordingly, a penalty on them under Rule 26 is also upheld. Ends of justice will met if the penalty imposed on them is reduced to ₹ 25,000/- (Rupees Twenty Five Thousands only) under Rule 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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