TMI Blog2011 (4) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... hree different parties who faced adverse consequence due to the same adjudication order are being considered. There is also an appeal filed by the Commissioner of Central Excise against Prabhat Rotopack Pvt. Ltd. Thus altogether four appeals are being considered together. 2. M/s. Prabhat Rotopack Pvt. Ltd. (Appellant No. 1), were registered with Central Excise department and they were engaged in the manufacture of printed flexible packing material (roll form) falling under Central Excise Tariff Item 39219096, printed flexible packing material in pouch form falling under Central Excise Tariff Item No. 39239090, polyethylene film falling under Tariff Item 32151110 and printing ink falling under Tariff Item 32151110. Shri Rajeev Agarwal Appellant No. 3 is the Director of the M/s. Prabhat Rotopack Pvt. Ltd, Appellant No. 1. 3. On 8-11-2006, a team of Central Excise officers while conducting preventive checks at the factory premises of Appellant No. 1 verified the stock of finished goods and stock of raw material lying in the factory premises of Appellant No. 1. Shortage of 2114.93 Kg. of printed flexible packing material (roll form) valued at Rs. 3,38,389/- involving total duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a penalty of Rs. 1,50,000/- (Rupees One Lac fifty Thousand only) in terms of Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. (2) That printed flexible packing material in roll form weighing 1486 Kgs. valued at Rs. 2,37,760/- are confiscated under Rule 25(b) of the Central Excise Rules, 2002. An option to redeem the same on payment of Rs. 75,000/- (Rupees Seventy Five Thousand only) is given to M/s. Prabhat Rotopack Pvt. Ltd., Mathura as the said goods owned by them as per statement of Shri Rajeev Agarwal, Director. (3) the demand of Cenvat amounting to Rs. 3,26,783/- and education cess amounting to Rs. 6,536/- totalling to Rs. 3,33,319/- (Rupees Three Lacs Thirty Three Thousand Three Hundred and Nineteen only) is confirmed against M/s. Prabhat Rotopack Pvt. Ltd., Mathura. As the said amount has already been paid by the said M/s. Prabhat Rotopack Pvt. Ltd., Mathura, I appropriate the same to the credit of the Government account. (4) that a penalty of Rs. 3,33,319/- (Rupees Three Lacs Thirty Three Thousand Three Hundred and Nineteen only) is also imposed upon M/s. Prabhat Rotopack Pvt. Ltd., Mathura under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department. Appeal No. E/694/2009 8.1 The argument on behalf of Shri Rajeev Kumar Agarwal, Director of M/s. Prabhat Rotopack (P) Ltd. is that there is no specific allegation in the Show Cause Notice against him and there is no clear finding in the impugned order in original about his culpability. Therefore, penalty cannot be imposed. It is also argued that since duty amount of Rs. 3,33,319/- was deposited even before issue of Show Cause Notice, the penalty imposed on the main appellant itself is not sustainable and, therefore, penalty imposed on him as a Director of Appellant No. 1 is also not maintainable. There is also a submission that the penalty amount of Rs. 3,33,319/- imposed on him is very harsh since the duty amount was deposited by the main appellant even before issue of SCN. 8.2 In the Central Excise Act as per Section 9AA where an offence under this Act has been committed by a company, every person who at the time of the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and pun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion fine of Rs. 2,50,000/-, and reduction of penalty from Rs. 1,50,000/- to Rs. 50,000/- against the Appellant No. 1. 10.3 The ld. DR argued that the seizure of finished goods from the premises of Appellant No. 3 shows that the party was in the habit of clearing goods without payment of duty. It is very obvious that the unaccounted goods were kept in the factory with the intention of clearing it without payment of duty. Since there is a statutory duty to account for manufactured goods lying in stock in the factory, the intention to evade duty become very obvious. He also argued that since the party has not paid penalty within 30 days of the order in original as required under Section 11AC concession of penalty only to the extent of 25% of duty evaded cannot be extended. The matter of redemption fine, the Departmental Representative submits that redemption fine imposed is only about 25% of the value of the seized goods which is very nominal and there is no reason to reduce the penalty. In the matter of penalty under Section 25(b), he argued that this is a separate penalty for non-maintenance of account properly and this penalty also has been properly imposed by the adjudicating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 11AC is imposed there is no scope for imposing penalty under Rule 25(b) for the same offence as decided in Ever Bright Tube Corporation v. CCE, Mumbai-III - 2010 (262) E.L.T. 700 (Tri. - Mumbai). Since the demand was already paid before the issue of SCN, the adjudicating authority should have given the option to pay applicable interest and 25% of the duty evaded. Since this was not done, following the decision of Delhi High Court in K.P. Pouches (P) Ltd. v. UOI - 2008 (228) E.L.T. 31 now I give the Appellant an opportunity to pay applicable interest on duty confirmed along with 25% of the duty evaded as penalty within 30 days of receipt of the order. If such payment is made it will be in full discharge of penalty on this count. If this is not done the full penalty will be payable. 16. In the case of penalty of Rs. 3,33,316/- imposed on Shri Rajiv Kumar Agarwal under rule 26 of the Central Excise Rules, I note that there is no legal requirement that the penalty should be equal to the duty evaded. After giving concession of paying 25% of duty evaded to the main appellant it is harsh to impose this amount of penalty on the Director of the company. So reduce this penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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