2005 (5) TMI 536 - AT - Central Excise

Summary

Issues: Alleged clandestine removal of goods without payment of duty, confirmation of demand of duty, imposition of penalties under Section 11AC and Rule 173Q, reduction of penalties based on pre-show cause notice deposit.

Alleged Clandestine Removal of Goods without Payment of Duty:
The Central Excise Officers visited the appellant's factory and found fictitious invoices showing fabrics dispatched to various parties, with duty debit particulars not matching statutory records. The appellant's representative admitted using these invoices for duty-free clearances, stating all details were bogus. The excise clerk and company director also confessed to clandestine removal of goods using fake invoices. Subsequent statements of others confirmed the clandestine removal without duty payment.

Confirmation of Demand of Duty:
Based on the above findings, proceedings were initiated against the appellants, leading to a demand of Rs. 3,06,855/- and identical penalty under Section 11AC, along with a personal penalty of Rs. 25,000 under Rule 173Q. The Commissioner (Appeals) upheld this order, prompting the present appeal.

Imposition of Penalties under Section 11AC and Rule 173Q:
The appellant contended lack of corroboration for the charge of clandestine removal, but the presence of fictitious invoices at the factory required explanation. Statements of various individuals and the director provided ample corroboration, leading to the confirmation of clandestine removal and duty demand. The personal penalty under Section 11AC was reduced to Rs. 2.00 lakhs due to a pre-show cause notice deposit of Rs. 50,000, while the penalty under Rule 173Q was set aside.

In conclusion, the appeal was rejected, confirming the demand of duty but modifying the penalties imposed based on the pre-show cause notice deposit.