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Kedia Castle Dellon Industries Ltd. And Shri Satish Kumar Batra Versus CCE, Meerut-1

2016 (8) TMI 577 - CESTAT NEW DELHI

Imposition of penalties - Rule 209A of Central Excise Rules, 1944 - clandestie removal of goods - various dummy/benami firms created - obtained hire purchase finance from various finance companies fraudulently - huge quantity of machinery, structurals etc. were shown accounted for in the books which were not available with M/s.Kedia Distilleries - Held that:- Appellant (Shri S.K.Batra) is one of the person alleged to be involved in scheming the financial fraud by acting as a proprietor of one of .....

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explained with evidence in the impugned order. As discussed earlier, we are dealing with mainly non-exiting machinery, created by book entries as part of financial fraud and some manufacture done by contractors. The role of appellant in the excise duty evasion has to be indicated and evidenced independently. Therefore, in the absence of coherent evidence to this effect the penalties imposed on appellants are not sustainable. - Decided in favour of appellant - Appeal No .E/2197 & 2619/2006-EX(DB) .....

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tain investigations conducted by the officers, proceedings were initiated against M/s.Kedia Distilleries to demand Central Excise duty and to impose penalties on them and various other co-noticees. Two appellants in the present appeals were also issued with notice. After due adjudication the impugned order came to be issued. The order confirmed a demand of ₹ 8,46,99,581/- on the main noticee (M/s.Kedia Distilleries) and imposed various penalties on all the noticees. The main finding is tha .....

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tallation. On physical verification most of these accounted machinery etc. were not found in the premises of the factory. The learned Commissioner confirmed the demand only on the ground that huge quantity of machinery, structurals etc. were shown accounted for in the books which were not available with M/s.Kedia Distilleries. 3. While considering these two appeals, we noticed that the parties in appeal are contesting imposition of penalty. It is noticed that Tribunal vide Miscellaneous Order No .....

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only though the sustainability of main demand will also have a bearing on the penal proceedings against the present appellants. 5. The learned Counsel for the appellants submitted that the whole proceedings resulting in the impugned order are not legally sustainable. The method adopted by the main party in the case, to raise finance creating dummy companies has been confirmed by Income Tax authorities. The modus operandi has also been discussed in the impugned order. There is no manufacture, cle .....

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ppeals. 6. The learned Counsel contended that the penalties under Rule 209A are not imposable on the appellants as there is no case of duty evasion and there is no penal liability on the appellants. 7. Leaned AR reiterated the findings in the impugned order. 8. We find that the admitted facts of the case indicate a financial fraud by the main party with the association of various other persons. The scheme devised is to obtain finance from financing companies by creating dummy firms, showing purc .....

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