TMI Blog2002 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh Punn against the respective penalties imposed on them. 2. Two Misc. applications are also before us. The Application No. 397/2001 was filed by M/s. Freezair seeking to raise an additional ground in their appeal, whereby they wanted to raise a contention that the indoor unit/air cooling unit meant for split air-conditioner was not excisable. It was submitted by the Counsel for the appellants at the time of final hearing that they did not press this application. Accordingly, Misc. Application No. 397/2001 is dismissed. 3. The other application before us is E/Misc/489/2001 which was also filed by M/s. Freezair seeking to introduce certain other additional grounds for their appeal. The claim for abatement of the element of duty from the invoice price of the goods for the purpose of determining the assessable value of the goods was sought to be incorporated in the appeal by way of this application. In this application, M/s. Freezair raised a further ground that, during the year 1997-98, their value of clearance was below Rs. 50 lakhs and therefore, they were entitled to SSI exemption. It was pointed out that the additional grounds sought to be raised in the appeal were based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant-company. 5. It appeared from the investigative results that M/s. Freezair manufactured and cleared excisable goods without payment of duty of excise amounting to Rs. 45,62,325/- during the years 1996-97, 1997-98 and 1998-1999. It appeared, they wilfully suppressed the manufacture of the goods and made clearance thereof clandestinely, without getting themselves registered with the Central Excise Department, without accounting for the production and clearance in statutory records, without submitting RT 12 returns/classification declarations/price declarations, without following the prescribed procedure and without maintaining statutory records, with intent to evade payment of duty. The Department, therefore, concluded that the amount of duty was recoverable from M/s. Freezair by invoking the extended period of limitation under Section 11A. It was also thought that M/s. Freezair and the two directors were liable to be penalised. Hence the show cause notice. The allegations in the show-cause notice were denied in the reply submitted on behalf of the parties by their Counsel. In adjudication of the dispute, the Commissioner passed the impugned order. 6. Examined the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Counsel, further, pointed out that, in the impugned order, there was no finding on penal liability of the appellants. 8. The learned Counsel Shri K.K. Anand, who represented Shri Kuldeep Singh in Appeal No. 3588, adopted the arguments of Shri Harbans Singh. 9. The learned DR referred elaborately to the various statements of the appellants and others given under Section 14 of the Central Excise Act, and claimed that the Department's case was virtually conceded by the appellants. He submitted that, in the factory premises of M/s. Freezair, another company, namely, M/s. IPUNN Temp. Control (P) Ltd. was feigning to be working, which had no capital goods or workers for any manufacturing activity but was issuing invoices showing clearance of excisable goods. The goods shown to have been cleared under such invoices had, in fact, been manufactured by M/s. Freezair. The learned DR submitted that this was a colourable device by M/s. Freezair to evade payment of duty. He relied on the Supreme Court's decision in the case of Calcutta Chromotype Ltd. v. CCE, Calcutta - [1998 (99) E.L.T. 202 (S.C.)]. Regarding the claim for abatement of duty, the learned DR submitted that such abatement h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender Singh Punn also admitted the clandestine removal of goods from their Patel Nagar godown. When confronted with the aforesaid documents, neither of the two brothers was able to rebut the Department's case. Shri S.K. Gaur, Chartered Accountant of the appellants, stated that the invoices had been prepared by him under instructions of Shri Kuldeep Singh Punn; that the production of goods recorded by him in RG.I was of such quantities of the goods as were required to be entered in the register, by Shri Kuldeep Singh Punn, and that the slips issued by their customers used to be directly submitted by them to the Directors. The implicating statements of Shri S.K. Gaur have not been contradicted by the appellants. Gaur was not cross-examined by any of the appellants. The customers, in their statements given under Section 14 of the Central Excise Act, admitted that the goods were received without bills and without payment of duty from M/s. Freezair. None of these witnesses has been cross-examined in this case, nor even sought to be cross-examined. Thus the evidence adduced by the Department has, by and large, gone unrebutted. All the documents viz. the original invoices, the photo-copie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 11AB. However, such demand cannot be raised on the duty payable for the period prior to 28-9-96, Section 11AB having come into force only on 28-9-96. 14. The Commissioner has imposed a penalty of Rs. 45,62,325/- on M/s. Freezair under Section 11AC read with Rule 173Q. Section 11AC and Rule 173Q are independent provisions standing on different footings. One cannot be read with the other. The learned Commissioner has not given any break-up of the penalty between the two provisions. Therefore, we are unable to sustain the penalty. The Commissioner will be at liberty to decide afresh on the question whether separate penalties under Section 11AC and Rule 173Q were liable to be imposed on M/s. Freezair and, if so, to what extent. But, while doing so, the adjudicating authority shall bear in mind that Section 11AC was not in the statute book prior to 28-9-96. 15. Personal penalties have been imposed on the Directors of the company under Rule 209A. For imposing a penalty under this provision of law, there should be a finding that the person sought to be penalised under this provision had acquired possession of, or was in any way concerned in transporting, removing, depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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