TMI Blog2018 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ry: This appeal by Revenue is against the order of the Commissioner for non-imposition of penalty on the respondents Shri Gopi Kishan Sharma. 2. The brief facts are that M/s Reliance Silicone India Ltd. (hereinafter referred to as the assessee) having its registered office at Thane Belapur Road, Navi Mumbai and factory premises at Village, Tambati, Khopoli Pen Road, PO Donvat, Taluka Khalpur, District, Raigad had obtained LOP from the Ministry of Industries, GOI dated 11 th July 1995 for setting up a 100% EOU for the manufacture of Silanes, Silicone based products, Silicone Rubber, Silicones falling under chapter 29 of the first schedule to the CETA, 1985. 3. The assessee had entered into a legal agreement with the Development Commissioner, SEEPZ on 2.12.1996 binding themselves to fulfil the conditions of the relevant notifications for setting up a 100% EOU with surety at Khopoli. They executed B-17 General Bond for ₹ 15 crores with the surety of M/s Manasvi Investment Pvt. Ltd. (hereinafter referred to as M/s MIPL) having the registered office at Bandra West Mumbai. During the course of a detailed investigation, it was found that the assessee had clandestinely clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing which it would be recoverable by enforcing B 17 bond as contemplated in the SCN dated 25/07/2005 answerable to CCE, writer, confirming the demand for ₹ 12,48,030/- as contemplated in SCN dated 06/10/2004 answerable to ADC, Raigad, ordering recovery of interest under Section 28(b) of Customs Act, imposing penalty of ₹ 10,44,42,708/- and ₹ 12,48,030/- under Section 114A of the Customs Act, denying the benefit of exemption Notification No. 1/95 CE dated 4.1.1995 and confirming the demand for Central Excise duty of ₹ 1,24,43,931/- raised with SCN dated 25/07/2005 and ordering its payment failing which it would be recoverable under the bond, demand of Central said duty ₹ 9,96,999/- and amount of ₹ 7 lakhs paid by the assessee was appropriated against this demand. Interest was ordered to be recovered. Further penalty of ₹ 1,24,43,931/- was imposed under Section 11 AC of the Central Excise Act read with Rule 26 of CER 2002. Further, penalty of ₹ 9,96,999/- was imposed under Section 11AC of the Central Excise Act, goods under seizure were confiscated under Section 111(o) of the Customs Act with an option to redeem the same on payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that non-imposition of penalty on the respondent Shri Gopi Kishan Sharma, who was the Vice President (Finance and Accounts) at the time when the raw materials/capital goods had clandestinely been removed from the bonded promises of the assessee RSIL, is not justifiable. Mr Sharma had continued to lead the team of personnel responsible for the procurement and dispatches of goods from the Khopoli unit. His submission that the permission of the Department under his control was not required for the removal of goods is not acceptable. In his statement dated 30/03/2004, Shri Sharma acknowledged in response to query No. (2), that since the time he joined he had been looking after Accounts and Finance Department of Reliance Silicone (I) Pvt. Ltd. He was looking after the Finance and Accounts of the 100% EOU at Khopoli. His participation in the affairs of the unit has been active and the findings of the Commissioner in this regard absolving him of all responsibility appears to be misplaced and untenable. Accordingly, ld. Counsel for Revenue states that penalty should have Been imposed on Shri G.K. Sharma taking into consideration the facts and grounds as mentioned in the Show Cause Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed matters or production or receipt/despatch of material of M/s RSIL. M/s RSIL had two independent units, one at Thane-Belapur Road (Vashi), where he was posted. The second unit was known as EOU unit at Khopoli. He had neither an office nor any infrastructure at the Khopoli Unit. Access to EOU unit at Khopoli was restricted to only a select few persons working in the plant, besides the owner directors. He had no authorisation to visit the plant at any time. Also, during the said period, he was not Director-Finance, as mentioned in the said show cause cum demand notice dated 16.10.04, when the alleged irregularity had taken place. He was promoted by the New Management of M/s RSIL only on 17.12.2003 and designated as a professional Director- Finance (Promotion Letter Annexure- B attached). He had left M/s RSIL on 16.06.04, before the issuance of SCN. The same had been duly reported to the Excise Department through his reply dated 18.11.04. he was not qualified nor did he possessed any knowledge, training or experience of any of the technicalities of production, process, reactions or any technical aspects of the plant, processes, machinery, environmental concerns, disposal, sale, mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Answer No. 5 that he had no knowledge of removal of the goods. The statement of Shri Pankaj Chandola, affirmation by Shri S.V. Gori, Senior Process Technician and also of Lab-in-charge confirms the noninvolvement of his part and indulgence of Management and further nobody has made statement against him nor there was any confession made by him. The removal of the goods was a policy decision. It contained high stake. The removal was not a stealth act which could be without knowledge of the Directors. The Management consisting of Directors had the prerogative to decide, direct and get executed the removal of material from EOU Unit at Khopoli to Non EOU Unit at Thane Belapur Road, New Mumbai. Further the Honourable Supreme Court/High Court/Tribunal has dropped the charges of penalty on the ground that the SCN has not expressly brought out charges of active role, knowledge and the goods liable for confiscation. The relevant judgements are stated as under: (a) M/s B. Lakshmichand Vs. GOI [1983 (12) ELT 322 (Mad.)] Proceedings should not be allowed to be prosecuted on vague and camouflaged hypothesis. Charges against the accused should be clear and not ambiguous (b) M/s B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Director-Finance and finally left the assessee on 16.06.04, before the issue of the impugned notice, which was issued on 6.10.04. Apparently, therefore, it was also not correct to issue the impugned notice to Shri Sharma, as Director (Finance) of the assessee. 38. In view of the same, I am inclined to accept the submissions made by Shri Sharma during the hearing and accordingly I feel that the penal proceedings initiated under the impugned notice against Shri Sharma needs to be dropped for want of any substantive details, to the allegation made. 10. According to the ld. Counsel states that in view of the categorical finding of the ld. Commissioner which have not been challenged and/or found wrong. There is no merits in the appeal of Revenue. Further, the grounds of Revenue are more or less repetition of the allegations in the SCN. Accordingly, prays for dismissal of the appeal. 11. Having considered the rival contentions, we find that the ld. Commissioner have considered the entire facts in Detail in a pragmatic manner. He has recorded categorical finding that the allegations in the SCN against Mr. Sharma are not substantiated. Further, the statement in question also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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