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2015 (12) TMI 1398 - CESTAT AHMEDABAD

2015 (12) TMI 1398 - CESTAT AHMEDABAD - TMI - Levy of personal penalties on the directors and partners of the defaulting company and firms for wrong claim of SSI Exemption - Appeal of the Main Assessee was already dismissed for non compliance of stay order - Heldthat:- A. R. Majmudar was involved in wrong availment of SSI exemption benefit. Thus, the imposition of penalty on Shri Majmudar as Director of M/s. Bakul is justified. We agree with the submission of the Learned Advocate that the imposi .....

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ssession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act, or these rules, shall be liable to a penalty. The expressions in any other reasons have wide amplitude. It is the case of Revenue that Mrs. Majmudar knowing fully was involved in wrong availment of benefit of SSI exemption by M/s. Bakul, wh .....

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e that one M/s Bakul Chemicals Pvt. Ltd. (in short of M/s Bakul) was engaged in the manufacture of various Chemicals. In the month of February 1988, the Central Excise Officers visited the factory premises of M/s Bakul conducted search and prepared Panchnama. It was found that M/s. Bakul floated M/s. Pocono Chemicals (in short of M/s. Pocono), a partnership firm and M/s Shonar Enterprises, Proprietorship firm, for availing SSI exemption with intention to evade payment of duty. A Show Cause Notic .....

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erstwhile Central Excise Rule, 1944. The land, building, Plant, Machinery etc. of M/s Bakul was confiscated and imposed redemption fine of ₹ 2 00,000.00. It has imposed a penalty of ₹ 1,00,000.00 each on Shri A.R. Majmudar M.D of M/s Bakul, Shri A.R. Majmudar, partner of M/s Pocono, Smt. A.A. Majmudar Proprietor of M/s Shonar under Rule 209A of Central Excise Rules, 1944. 2. The Learned Advocate appearing on behalf of the appellants submits that the appeal filed M/s Bakul was dismiss .....

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tral Excise Rule, 1944 cannot be sustained for the reason that Rule 209A would apply in case, where the goods are liable for confiscation under the Central Excise Act and Rules made thereunder. In the present case, the Adjudicating Authority had not confiscated the goods, and the imposition of penalty under Rule 209A can not be maintained. He further submits that the appellants had not acquired the goods in any manner and the imposition of penalty under said Rule would not apply. He further subm .....

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were eligible SSI exemption. He relied upon the various case laws as under:- 1. Commissioner of Central Excise., Jameshedpur vs. Xenon 2013 (296) E.L.T. 26 (Jhar.) 2. P&B Pharmaceuticals (P) Ltd. vs Collector of Central Excise 2003 (153) E.L.T 14 (S.C.) 3. ECE Industreis Limited vs. Commissioner of Central Excise New Delhi 2004 (164) E.L.T 236 (S.C.) 4. Nizam Sugar Factory vs. Collector of Central Excise 2006 (197) E.L.T. 465 (S.C.) 5. Pravin N. Shah vs. CESTAT 2014 (305) E.L.T. 480 (Guj.) .....

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units and therefore, imposition of penalties on both the appellants are legal and proper. He further submits that M/s. Bakul floated M/s Shonar and M/s Pocono, which are existing in paper and the penalties imposed on the said firms are justified. The appeal of the main appellant M/s Bakul has already been dismissed and the imposition of penalties on the other units are liable to be upheld. He relied upon the decision of the Tribunal in the case of British Scaffolding India Pvt Ltd and ors. Vs. C .....

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lty of ₹ 5,00,000.00 each under Rule 173Q (1) of the erstwhile Central Excise Rules, 1944. Shri A.R. Majmudar, filed two appeals as M.D. of M/s Bakul and the other appeal as partner of M/s Pocono against imposition of penalty of ₹ 1,00,000.00 each. Smt. A. A. Majmudar, proprietor of M/s Shonar filed appeal against imposition of penalty of ₹ 1,00,000.00 under Rule 209A of the Central Excise Rules, 1944. The Learned Advocate submitted that the appeal filed by the main appellant M .....

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tch reports, shift registers, the correspondences etc. are evidencing the break up of the purchase orders into different unit to avail admissible limit of value of clearance of the goods in their SSI units, prove the case of the department that they had indulged in the evasion of the central excise duty. It is further observed that M/s Bakul in their Bank Statement was reflecting the production of other units, for taking higher credit limit/Bank loans. It is the case of the Department that the M .....

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and registered person of a warehouse or a registered dealer. The expressions any manufacturer, producer in Rule 173Q of the erstwhile Central Excise Rule, 1944 make it clear that the said rule would be applicable of the manufacturer and producer. In the present case, according to Revenue M/s. Bakul is the manufacturer, producer of the excisable goods and the Central Excise Duty was demanded on M/s. Bakul. It is the case of the Revenue that the other unit M/s Pocono and M/s Shonar are dummy and t .....

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posed on Shri A.R. Majmudar as M.D. of M/s Bakul and partner of M/s Pocono. The Adjudicating Authority observed that Smt. A.A. Majmudar, during the investigation admitted that she was looking after the working of M/s. Shonar. It is also observed that Shri A.R. Majmudar, as Director of M/s Bakul floated the various firms to evade central excise duty. The main contention of the Learned Advocate is that the Tribunal passed the order in favour of M/s Bakul on the identical situation for the earlier .....

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