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Krishan Kumar Versus Union of India And Another

2015 (12) TMI 1104 - PUNJAB & HARYANA HIGH COURT

Recovery of dues of the company from the Director - Duty demand - Clandestine removal of goods - Held that:- It is well settled that in the absence of any specific provision in the statute, the duty/penalty liability of the company cannot be recovered from the assets of its director. The Director is not personally liable towards liability of the company. This court while delving into an identical issue in Subhash Goyal vs. State of Haryana and others, held that in the absence of taking any speci .....

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proceed against the company for clearance of its dues in accordance with law. - Petition disposed of. - CWP No. 9363 of 2015 - Dated:- 18-11-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr Jagmohan Bansal, Adv. and Mr Roopak Bansal, Adv For the Respondent : Mr Kamal Sehgal, Adv JUDGMENT Ajay Kumar Mittal, J. 1. This order shall dispose of CWP Nos.9363 and 11364 of 2015 as learned counsel for the parties are agreed that the issue involved in both the petitions is identical .....

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y is engaged in the manufacture of false roofing sheet/metal sheets falling under Chapter heading 72104100 of the Central Excise Tariff Act, 1985. It is having two directors namely Palvinder Singh and Krishan Kumar - petitioner. Due to dispute between the directors, Palvinder Singh tempted the respondent department to initiate investigation against the company. Accordingly, investigation was conducted. Respondent No.2 issued show cause notice to the company calling upon it as to why duty amounti .....

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ty under Rule 26 of the Rules. Duty of ₹ 33.50 lacs was confirmed against the company apart from equal amount of penalty. Penalty of ₹ 3 lacs each on both the directors was also imposed. Thereafter, vide letter dated 11.11.2009, the petitioner informed the department that the business of the company stood closed and it had stocks and machineries to discharge the excise duty liability and that the amount may be recovered by attachment of properties. On the other hand, the petitioner f .....

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f eight weeks. The petitioner deposited ₹ 1 lac as per the order but the company did not comply with the order. Vide order dated 24.2.2012, the Tribunal dismissed the appeal filed by the company. Thereafter, vide letter dated 7.02.2013, Respondent No.2 directed the company and its directors to deposit entire amount of duty alongwith 25% of duty as penalty. The petitioner vide letter dated 28.3.2013, Annexure P.7 informed respondent No.2 that all the plants and machineries were under the ch .....

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y. Hence the instant petition by the petitioner. 4. In the reply filed on behalf of respondent No.2, it has been inter alia stated that during investigation, it was found that the unit was indulging in clandestine removal and undervaluation of goods manufactured by it. After investigation, demand of ₹ 33.50 lacs with equal amount of penalty was imposed on the company by the adjudicating authority. Since a huge amount of public money was to be recovered from the company, accordingly, notice .....

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er dated 30.9.2009, demand of ₹ 33.50 lacs was confirmed against the company with equal amount of penalty. The company as well as its director i.e. the petitioner challenged the order by filing appeals before the Commissioner (Appeals) which were dismissed on 22.6.2010. Aggrieved by the order, they filed appeals before the Tribunal. Vide order dated 24.2.2012, the Tribunal dismissed the appeal of the company as it failed to deposit the entire duty alongwith 25% of penalty within a period o .....

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absence of any specific provision in the statute, the duty/penalty liability of the company cannot be recovered from the assets of its director. The Director is not personally liable towards liability of the company. This court while delving into an identical issue in Subhash Goyal vs. State of Haryana and others, 2014(4) PLR 343 held that in the absence of taking any specific recourse to proceedings under Section 18 of the Central Sales Tax Act, 1956 and any valid order for effecting recovery .....

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