TMI Blog2007 (1) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... nalties. The Commissioner has discussed the evidence against both the persons and has held that they were liable for penalty in terms of Rule 209A of the CE Rules. The findings recorded in paras 9 to 15 are reproduced herein below. FINDINGS 9. I have carefully gone through the case records, written submissions and the submissions made at the time of personal hearing. I find from the case records that the investigating agencies recorded statements from several persons. After going through the records I find from the statements relied upon in the Show Cause Notice, given by S/Shri P.C. Panthulu, Finance. Manager dated 22-2-1989, Kumud Dhariya dated 15-2-1989, N. Satyanarayana dated 23-8-1989 and P.V.G. Nair dated 21-2-1989 that the epicentre of these clandestine operations is at Bombay. It is clear from statement of Shri Mandala Janakiram dated 21-2-1989 that though he is the Managing Director of the firm, he was more or less functioning figuratively with the actual work being done by others like S/Shri Subhash Gupta, Kumud Dhariya, who were present most of the time in Bombay. It was stated by Shri Mandala Janakiram, in his statement dated 21-2-1989, that Subhash Gupta was givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the AWR by the Range Superintendents regarding misuse of Modvat credit. However, I agree with the submissions of Shri Mandala Janakirain about his lack of knowledge in industrial activity and of his being an active participant in the political arena. For the reasons discussed above, I find that Shri Mandale Janakiram, as Managing Director of AWR and being overall in charge of the factory, cannot escape completely from this onerous responsibility by taking shelter under the plea of innocence and ignorance. It is on record that he had taken part in the scheme of things directed by Shri Subhash Gupta and therefore penalty under Rule 209A of Central Excise Rules, 1944 is imposable on Shri Mandala Janakiram. 14. On examination of the following records viz. (a) Letter No. 1/183/CL.VII /87 dt. 16-9-1987 of the Government of India, Ministry of Industry, Department of Company Affairs , New Delhi, issued in connection with the appointment of Shri. Mandala Janaki Ram as MD Shri. Subhash Gupta as a whole time director of M/s. Asian Wire Ropes for a period of 5 years w.e.f. 1-5-1986. (b) Minutes of meeting of the Board of Directors held on 1-3-1988 wherein it was resolved th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Shri Dhariya furnished the reply to the notice, appeared for the hearing and explained his role, which was accepted by the adjudicating authority. I further find that, the argument advanced by Shri Gupta that the alleged transactions of wrongful availment of modvat credits were done after his resignation from the company, and that he was not even a shareholder of the company after his resignation from the company, and that he was not even a share holder of the company after his resignation from the Company, and he had no personal knowledge of the irregularities and as such no penalty is imposable, is not acceptable for the reason that all the irregularities that happened were during the tenure of Shri Subhash Gupta as a Whole time Director of the company from 1986 to 1988. I further find from the records that Shri Subhash Gupta was overall in charge and specifically looking after the Imports. Exports and raw material procurement, production planning etc., and all the employees were working with him since inception of the factory and all the transactions were held at his behest and under his stewardship and also that he used to insist very frequently that nobody should give inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i M. Janaki Ram was not concerned with the day to day running of the business and that he was only an MD for name sake. Having held so he ought to have been exonerated. The finding recorded is contradictory in nature and therefore on the basis of the presumptions, penalty can not be imposed under Rule 209-A of CE Rules, unless the department proves his involvement in evasion of duty. 4. Learned DR submits that penalty has been rightly imposed on both the persons. Evasion of duty is enormous and that Asian Wire Ropes have not challenged the confirmation of duty. In terms of statement of all the persons, it is clear that both the appellants were involved in the affairs of the Company and therefore in terms of Rule 209-A penalty is imposable and the same could be confirmed. 5. Learned Chartered Accountant further submits that Shri Subhash Gupta did not receive the benefit of the sale of goods. Instead he was getting nominal salary. Today, he is an indigent person without any means and employment. He is totally ruined and not in a position to pay any penalty. He submits that this point should also be taken into consideration. 6. We have considered the submissions made by both sid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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