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TMI Blog2012 (4) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that there was clandestine removal of resin CP172SG by Natraj Plast Industries Ltd. to the extent of 768.03 Mt is perverse. The Tribunal has wrongly and erroneously recorded that 768.03 Mt of resin was sold and transported to M/s Aditya Plastics, sole proprietorship of Mr. Rajesh Mittal and M/s Mukesh Industries, sole proprietorship of Mr. Sunil Mittal. 4. Learned counsel for the appellant accepts and admits that there was clandestine removal and sale of resin CP172SG by Natraj Plast Industries Ltd. to Aditya Plastics and Mukesh Industries but it is submitted that the quantity computed by the Tribunal is based upon surmises and conjectures and there is no concrete evidence or material to hold that 768.03 Mt. or resin CP172SG was clandestinely sold. 5. Resin CP1725Sg is manufactured by one company in India, namely M/s Chemiplast Sanmar Ltd. There is no dispute that the appellant, Natraj Plast Industries Ltd., has purchased 1102.715 MT of the aforesaid resin from M/s Chemiplast Sanmar Ltd. during the period 1/11/2001 to 14/2/2006. On 14/2/2006, a search was conducted in the premises of Natraj Plast Industries Ltd. and statement of Dinesh Kumar Gupta, one of the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the quantity of 1112.705 MT of Resin purchased by them, which indicates that the bulk of the quantity has been illicitly diverted." 6. Apart from the fact that Mr.Dinesh Gupta in his statements had never claimed that he has used resin CP172SG for manufacture of PVC compound, the Tribunal has noticed that resin 6701 was used in the manufacture of PVC compound. The said resin was purchased by the Natraj Plast Industries Ltd. from three companies. Moreover, it was for Natraj Plast Industries Ltd. to show and establish that the resin 6701, procured and purchased by them, was not sufficient for manufacture PVC compound as recorded and, therefore, resin CP172SG was used in the said manufacture. The Tribunal has referred to PVC compound as single type and as per the findings recorded by the Tribunal, resin 6701 was used for manufacture of the said compound. We do not find any error in the findings by the Tribunal on the said aspect or any reason to hold that the finding is perverse or not justified. 7. The aforesaid quantum, i.e. 768.03 Mt., has been calculated by the Tribunal on the basis of the quantity purchased, less the consumption for production of PVC compound as recorded in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile strength, tear strength and elongation by ASTMD882, ASTMD 1004 and ASTMD882 method respectively, the method adopted by Inhouse Laboratory of M/s Motherson Somu is not known. In view of the above, so far as the claim of M/s Natraj regarding use of 230.72MT of CP1725G resin in the use of PVC tape is concerned, they have to be given the benefit of doubt. However, with regard to 768.03 MT of CP1725G resin, the department‟s allegation that the same had been illicitly diverted is on strong footing and the same is upheld. M/s Natraj will therefore, have to pay along with interest the amount of cenvat credit taken on 768.03 Mt of CP1725G resin. Since this quantity of resin has been illicitly diverted by fraudulent means without reversing the cenvat credit, for recovery of cenvat credit on this quantity, longer limitation period under proviso to Section 11 A (1) Central Excise Act, 1994 would be available to the department and for the same reason penalty under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, would be imposable on M/s Natraj." 8. Under Rule 15(1) of Cenvat Credit Rules, 2004, any input or capital goods, in respect of which cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm means a partner in the firm. The High Court was clearly right in holding that once it is found that there has been a contravention of any of the provisions of the foreign Exchange Regulation Act read with Sea Customs Act by A firm, the partners of it who are in-charge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that the contravention took place without their knowledge or the exercised all due diligence to prevent such contravention." 10. We may also note that a similar contention was raised before Supreme Court in Standard Chartered bank and Ors. V Directorate of Enforcement and Ors. (2005) 275 ITR 81. The majority view elucidated that a company can be prosecuted and punished for an offence under Section 56(1) (i) of the Foreign Exchange Regulation Act, 1973, even though imprisonment for a term of not less than six months was compulsory. It was also held that legislative intent to prosecute corporate bodies for the offence committed by them is clear and explicit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Separators for which principal raw material is CP 172 SG Resin and that while same had been purchased directly from M/s. Chemplast under invoices, substantial quantity had been purchased without any invoices from M/s. Natraj. 1.6 It was also found that while in course of search of the premises of M/s. Aditya Plastics on 14.02.2006, 100 bags of CP 172 SG Resin of Batch No. 369 had been recovered, 148 bags of CP 172 SG Resin of the same batch had been supplied by M/s. Chemplast to M/s Natraj under invoice date 30.12.2005, which indicated that 100 bags of CP 172 SG Resin seized from the premises of M/s. Aditya Plastics had come from M/s. Natraj, as there was no purchase of CP172 SG resin of Batch No.369 by M/s. Aditya from M/s. Chemplast. In case of M/s. Mukesh Industries, in course of search of their premises on 14.02.2006, 520 bags of CP 172 SG Resin of Batch No.408,409,410,411 and 414 had been found. On inquiry with M/s. Chemplast, it was found that these batches had been manufactured in their manufacturing unit at Salem, Tamil nadu, from where the same had been transferred to their depot at Delhi on 13.01.2006, 15.01.2006, 18.01.2006 and 17.01.2006. However, the last purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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