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TMI Blog2013 (11) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... d to trace the sources of evasion and parties involved therein, so also to assess loss of Revenue made by these parties and recover the same. It was revealed that these manufacturers have suppressed more than 50% of actual quantity/value of the clearances made by them falsely describing sizes of the wires and cables on the invoices and understating weight of such goods on the Lorry Receipts. It was further revealed that 'Paragon' group of manufacturers of wires and cables resorting to the above practice had evaded Central Excise duty. 1.3 Search operation was conducted to the premises of following concerns on 21.2.2002: (1) Paragon Cable Co. (2) Paragon Enterprises (India) (3) Paragon Power Cable ltd. (4) Paragon Cable Industries (P) Ltd. (5) Paragon Cable Corporation (6) Paragon Cable India (7) Roxy Electricals (8) Janata Cable Company (9) Rolex Cable Company 1.4 While making search to the premises of Paragon Cable Co., a partnership of Mrs. Prem Nagpal and Sri S.N. Nagpal at 308/9, Sahahzada Bagh, old Rohtak Raad, Delhi, Sri D.L. Nagpal husband of Mrs. Prem Nagpal who was owning M/s Roxy Electricals at Bhagirath Palace was present during search. He was looking after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized finding to be existing without duty paying documents. Those goods were seized and directed to be released on payment of redemption fine of Rs.1.00 lakh. Proceeding against its partner Sri D.L. Nagpal who is in appeal No. E-313/2005 in Table -2 of this order was also initiated and penalty of Rs. 50,000/- was imposed on him under Rule 209A and 26 of Central Excise Rules, 2001. 1.12 Search to the premises of Janata Cable Company revealed that the said concern was manufacturer of wire and cables of Paragon brand belonging to Paragon Cable Co., being financially supported by the later. M/s Janata Cable Company was not registered under Central Excise Act, 1944 to manufacture the branded goods. Such fact was admitted by assessee during search. Incriminating documents and records were also recovered in the course of search. 1.13 Search to the premises of M/s Rolex Cable Company revealed that it was financially supported by Paragon Cable Co., to manufacture Paragon brand wires and cable without being registered under central Excise Act, 1944. Such branded goods were cleared by that concern and such fact was admitted in the course of search. Added to this, incriminating documents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 8. E-330/2005 Gautam chand Jain - - - 50,000 9. E-328/2005 Metal & Metal electronic Pvt. Ltd. 10,00,000 - - 1,00,000 10 E-329/2005 Kantilat Jain - - - 50,000 2.3 On the basis of seizure of goods in Chennai, residential premises of Metal and Metal in Chennai was searched and certain incriminating documents and papers were recovered. Similarly search to the residential premises of Sri Kantilal Jain, Managing Director of Metals & Metal (Electric) Pvt. Ltd. was made on 21.2.2002 and 3.5.2002 and investigation found questionable materials from that concern also. Similarly search to the premises of Sri S.N. Nagpal, Sri D.L. Nagpal was made and that resulted in recovery of materials showing evasion of duty. 2.4 Seizure of goods as above from different premises revealed involvement of Metal & Metal Electric Pvt. Ltd. in Chennai. Redemption fine of Rs.10.00 lakh and penalty of Rs.1,00,000/- was imposed on that concern. Proprietor of metal and Metal and director of Metal and Metal Electric Pvt. Ltd. Sri Gautam Chand Jain was penalised to the tune of Rs.50,000/- being connected with undervalued consigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any penalty levied. 3.1 On the basis of outcome of investigation and examination of records, documents and papers recovered in the course of search, statements were recorded from various persons in Chennai and Delhi. Revenue proceeded to investigate history of past clearances of goods for the period April 1998 to February 2002 made by the concerns in sl. No. 1 to 7 depicted in Table-1 aforesaid who are in the appeals noted against each. 3.2 When enquiry into the past clearances of different concerns appearing in Table-1 aforesaid revealed that there were difference in weight of the goods in excise invoices and transport documents and following appellants were connected with such practice, they faced charge and penalty as noted against each in Table-2 were imposed as depicted hereunder: TABLE-2 Sl. No. Exice Appeal No. Appellant Connection/Status with concerns involved in the adjudication proceedings Penalty imposed 1 312/2005 Somanath Nagpal Partner of paragon cable company 50,000 2 313/2005 D.L. Nagpal Partner of paragon cable company 50,000 3 331/2005 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Rule 9(1), 52A, 53, 54, 173F, 173G, of as the Central Excise Rules, 1944 and Rule 4, 6, 8, 10, 11, & 12 of the Central Excise (No. 2) Rules 2001 read with Section 38A of the Central Excise Act, 1944. (iv) Wires and cables of 'paragon' brand were manufactured by the group without payment of Central Excise Duty amounting to Rs.2,03,003/-, Rs.2,28,902/-, Rs.5,43,751/- and Rs.13,88,808/- and Rs.3,89,738/- and were cleared clandestinely by M/s Paragon Cable Co., M/s Paracon Cable Co., M/s Paragon Enterprises (India), M/s Paragon Cable Corporation and M/s Paragon Power Cable Ltd., respectively in term of proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944 for which extended period of limitation. (b) M/s Janta Cable Co., Delhi and M/s Rolex Cable Co., manufactured and cleared wires and cables of 'paragon' brand not owned by them and removed clandestinely under their own invoices without payment duty and without obtaining Central Excise Registration and without following the proper procedure under the Central Excise Law. Goods valued at Rs.94,60997/- and 85,35,272/- respectively involved Central Excise Duty of Rs.15,58,069/- and Rs.14,14,299/- respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001 read with Section 38A of Central Excise Act, 1944. ARGUMENT ON BEHALF OF APPELLANT 5.1 Learned Counsel spearing on behalf of aforesaid appellants Challenged various consequences of adjudication submitting as under: (1) Duty of Rs.1,20,463 was demanded by the learned Commissioner in respect of seized goods in Chennai overvaluing the same while in case of the goods covered by invoices, he had demanded duty on the differential value. Such approach was arbitrary. Therefore, duty and penalty demand on this count is liable to be set aside on the ground of incorrect calculation. (2) For goods seized at Chennai and involving duty evasion of Rs.1.2 lakh as determined by the learned Commissioner, he has imposed redemption fine of Rs.10,00,000/- on M/s. Metals & Metal (Elect) Pvt. Ltd. which is unreasonable and disproportionate as well as arbitrary and may be reduced considering the amount of duty involved. (3) Past clearance were not at all made with misdeclaration of weight for which neither duty nor penalty imposable on the appellant at sl. No. 1 to 7 of Table-1 above. (4) For goods value of Rs.3,62,500/- seized from M/s. Roxy Electricals, that did not warrant redemption fine of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts does not at all grant any concession to appellants who had consciously made breach of law and leniency plea of the appellants if permitted to be entertained that shall be an incentive to evaders. 6.4 So far as allegation of use of brand name is concerned Revenue submitted that inquiry revealed use of brand name by Rolex Cable Co. from the day of setting up of their business but not w.e.f. 1.4.2001 and by Janta Cable Co. only from 1.1.2002 as pleaded by them. They were using the brand name. Therefore, in absence of any cogent evidence to the contrary no reduction to the adjudicated demand of duty and penalty should be granted which otherwise shall hamper interest of Revenue. 6.5 So far as leniency plea of the appellant in respect of penalties imposed on the Director and Proprietors covered by show cause notice dated 2.5.2003 is concerned, Revenue submitted that they being conduit to cause loss to Revenue, they do not deserve any leniency. Tribunal should not take a view that persons connected to cause evasion were innocent. Therefore, irrespective of their status as Director, Proprietor or partner of the respective concerns, penalty should be levied indiscriminately when they w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, neither the process of adjudication nor the findings made in adjudication can be held to be faulty. Causing of mass scale evasion by appellants was established on record backed by cogent evidence. Therefore adjudication cannot be disturbed. 7.4 Now, the only point that comes for consideration is the quantum of redemption fine imposable on M/s Metal and Metal (Elect.) Pvt. Ltd. and on M/s Roxy Cables. There was duty demand of Rs.1.2 lakhs in respect of seizure of goods in Chennai and M/s Metal and Metal (Elect.) Pvt. Ltd. faced redemption fine of Rs.10 lakhs. Ld. Authority, Authority below did not justify levy of such huge redemption fine without examining any other undue gain other than duty element if nay made by that appellant. Making an overall assessment of the situation, redemption fine in the case of Metal and Metal (Elect.) Pvt. Ltd. is reduced to Rs.2.5 lakhs which shall be twice the duty element looking to the magnitude of evasion and questionable modus operandi followed. 7.5 So far as the imposition of redemption fine of Rs.1.00 lakh on seized goods of Roxy cable is concerned, that was imposed on the value of goods of Rs. 3,62,500/-. Looking to the value of goods an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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