TMI Blog1999 (8) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... n Karan Packaging under Rule 9(2), 52A(5) and 173Q of Central Excise Rules, 1944 read with Section 11AC of Central Excise Act, 1944 and a penalty of Rs. 20 Lakhs each has been imposed on Shri Balbir Singh, Managing Director and Shri P.G. Mohan Dass, General Manager both of Karan Industries and Karan Packaging under Rule 209A of Central Excise Rules. The appellant Karan Packaging is a manufacturer of Polyethylene Films from polyethylene granules. They, alongwith Karan Industries Ltd., were parties in a common proceeding initiated under show cause notice No.V (39) 15-31/96/Adj/12017 dated 20-2-1997 by the Commissioner of Central Excise and Customs, Indore. The notice related to allegation of evasion of Central Excise Duty in the manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the appellants in the case. These paragraphs are reproduced below :- 8(b) Shri Balvir Singh, Managing Director of M/s. K.I. in his statement stated that :- (i) Besides manufacturing of poly films, both the units have been engaged in trading activity of the same commodity i.e. poly films. (ii) M/s. Karan Packaging is engaged in the manufacture of poly film but in the past, they were also engaged in the trading activity of poly films manufactured by M/s. K.I. (iii) M/s. K.P. at present purchase the waste generated by M/s. K.I. and then the same is being sent to Ms. K.I. for conversion into R.P. granules under Rule 57F(3) and then M/s. K.P. produces the poly films out of these RP granules. (iv) Although M/s. K.I. have the recyc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rotit. 4. Ld. Counsel submitted that the above paragraphs contained only narration of the statement rendered by the appellants during investigations. No finding has been recorded to show that the appellants were, in any way, involved in or responsible for the duty evasion. He submits that in the absence of a finding that they were involved in the duty evasion no penalty could have been imposed on them. 5. Heard Shri P.K. Jain, ld. SDR for the Revenue. He submitted that the allegation in the notice was that both Karan Industries and Karan Packaging were involved in clandestine production of polyethylene film. The adjudication order also takes note of and accepts this position. Further, both the companies are part of the same group. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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