TMI Blog2018 (11) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... ld suffice to establish the clandestine removal and the handling of such goods by M/s Royal Synthetics. In the circumstances, the appeal of M/s Royal Synthetics fails to find favor. The penalty imposed on Shri Ajay Shah is set aside while the penalty imposed on M/s Royal Synthetics is confirmed - appeal allowed in part. - APPEAL NOS: E/1650 & 1651/1998 - A/87853-87854/2018 - Dated:- 6-11-2018 - Shri C J Mathew, Member (Technical) And Shri Ajay Sharma, Member (Judicial) Shri JC Patel, Advocate for appellants Shri S Hasija, Superintendent (AR) for respondent ORDER Per: C J Mathew The appellants, M/s Royal Synthetics and Shri Ajay Shah, seek the setting aside of penalties of ₹ 10,00,000 each imposed on them under rule 209A of Central Excise Rules, 1944 in order-in-original no. 201/97-COMMR dated 29 th November 1997 of Commissioner of Central Excise Customs, Mumbai-III in proceedings relating to alleged clandestine removal of goods by M/s Universal Polymers. 2. It is alleged that M/s Universal Polymers had evaded duties of central excise to the tune of ₹ 29,23,381 through unaccounted production and clandestine clearance using the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said statements have to be eschewed from consideration, as they would not be relevant for proving the truth of the contents thereof. 4. He also contends that the rule 209A of Central Excise Rules, 1944 is not applicable to individuals except for established active participation or abetment in evasion. Drawing attention to section 9AA of Central Excise Act, 1944 which, being pari materia with section 140 of Income Tax Act, 1961, could lead to parallel imposition of penalties on the company and individuals but not to partnership firms except, as held by the Hon ble High Court of Bombay in Amritlakshmi Machine Works v. Commissioner of Customs (Import), Mumbai [2016 (335) ELT 225 (Bom)] in the special circumstances of 39. In the light of our above discussion, we answer the two questions posed for our opinion as under :- Question (a). - Yes. Simultaneous penalty can be imposed both on the partners and partnership firm under Section 112(a) of the Act where the charge on the firm is of acting or omitting to act rendering the goods liable for confiscation and the notice issued to the partner makes out a separate case of abetment on his part. This abetment should be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the second question, the decision of the Division Bench of this Court in Textoplast Industries v. Additional Commissioner of Customs reported in 2011 (272) E.L.T. 513 (Bom.) lays down the correct law in holding that it is permissible to impose penalty separately on partnership firm and the partners in adjudication proceedings under the Customs Act. in the decision in re Amritlakshmi Machine Works. According to him, the Larger Bench of the Tribunal has, in Gopal Industries Ltd v. Commissioner of Central Excise, Indore [2007 (214) ELT 19 (Tri7 E/1650 1651/1998 LB)], approved of the validity of private records to establish clandestine removal thus 18.1 The Daily report tin factory note-book contained details of production and issue of tin containers by the appellant, which did not reflect in the statutory record. The details of production and clearance of tin containers were also shown in the note-book Daily production report separately in respect of the appellant firm which tallied with the figures shown in the Daily report tin factory which contained figures both for the new tin factory as well in the name of the appellant. In this context, it will be not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RG. 1 register of the appellant. This not a case where mere private record without anything more is relied upon. The private record was recovered from the factory of the appellant, and it is established beyond doubt and not even disputed that it was so recovered and that it belonged to the appellant. The nature of particulars contained in this private record clearly go to show their intrinsic authenticity about the clandestine production and removal of the excisable goods by the appellants who had obtained the excise registration for the manufacture of such goods in the firm name. There cannot be more authentic evidence than recovery of the said private record from the appellant s factory which admittedly was prepared and bears the signatures of the supervisors of the appellant, and which is proved to have been maintained in the factory, from the statements of the partner Shri Yogesh Garg, the Electronics Engineer, Shri Awadesh Kumar Saxena who has made several daily reports in the said book, and the authorized signatory, Shri Girijesh Rai in whose presence the note-books were recovered under a panchnama. In answer to question No. 18, Shri Awadesh Kumar Saxena who was shown the Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 1944. Notwithstanding the various decisions cited by Learned Authorised Representative, the test prescribed by the majority decision of the Hon ble High Court of Bombay in re Amritlakshmi Machine Works would determine the imposition of penalty on Shri Ajay Shah. It is seen from the impugned order in 56. In view of the above facts and evidence on records, I find that Shri M.P. Choksy of M/s Universal Polymer with Shri Ajay Shah of M/s Royal Synthetics with his trading racket have conspired for systematic evasion of Central Excise duty. M/s. Royal Synthetics have supplied raw material and M/s. Universal Polymers have manufactured Alkyd Resin. The relation of Shri Ajay Shah of M/s. Royal Synthetics and Shri M.P. Choksy of M/s. Universal Polymer is as Principal manufacturer and Job worker. From the raw materials supplied by M/s. Royal Synthetics, the assessee (M/s. Universal Polymer) have manufactured Alkyd Resin and cleared under paralle set of invoice and evaded Central Excise duty. This finished product i.e. Alkyd Resin was delivered to M/s. Royal Synthetic who with the help of his trading racket managed entire sale as trading sale and evaded Central Excise duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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