TMI Blog2019 (1) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... to cross-examine Shri Praveen Maheshwari - However, it appears from the record that no opportunity to cross-examine Shri Praveen Maheshwari was afforded. And as evident from the order dated 16.06.1999 passed by the Adjudicatory Authority, the statement of Shri Praveen Maheshwari was relied upon to arrive at a conclusion that the Director was knowing or had reason to believe that the entire transaction was fake. In the case at hand, the penalty under Rule 209A of 1944 Rules is attracted only when it is established that it was within the knowledge and has reason to believe that the excisable goods is not confiscable - The authorized signatory and Director has stated that the material was purchased through broker was “on for” basis in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an exception to the final order dated 08.10.2003 passed by the Customs, Excise Service Tax Appellate Tribunal, New Delhi, in appeal against an order dated 31.03.2003 passed by the Commissioner (Appeals-II), Customs Central Excise, Indore. (2) Respondent No.1 engaged in the manufacturing of M.S. Ingots falling under Chapter sub-heading No.7206.90 of the Schedule to the Central Excise Tariff Act, 1985 was granted the facility of MODVAT (now CENVAT) credit of duty paid on inputs under erstwhile Rule 57A of Central Excise Rules, 1944. To adjudge the genuineness of input documents Annexure D was sent to different ranges for verification. On receipt of the verification report from Superintendent, Central Excise, Range-V, Division Howrah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is disallowed and confirm for recovery under Rule 57I (ii) of the Central Excise Rules, readwith Section 11A of the Central Excise Act, 1944. (ii) I impose a penalty of ₹ 30,360/- (Rs. Thirty Thousand Three Hundred Sixty Only) upon the noticee No.1 under Rule 57I (4) read with Rule 173Q of the Central Excise Rules 1944. (iii) I impose the personal penalty of ₹ 30,000/- (Rupees Thirty thousand Only) upon the noticee No.2 under Rule 209A of the Central Excise Rules 1944. (iv) Noticee No.1 is also liable to pay interest at the appropriate rate on the duty confirm above, in terms of Rule 57I (5) of Central Excise Rules, 1944. (6) An appeal under Section 35A of 1944 Act preferred against the order dated 16.06.1999 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als in any manner any excisable goods are liable to confiscation. (11) The expression knows as per Merriam Webster Dictionary means (1) to perceive directly: have direct cognition of; (2) to be acquainted or familiar with (3) to be aware of the truth or factuality of: be certain of; (4) to have knowledge. It means to have knowledge; to possess information, instruction or wisdom. (The Major Law Lexicon: 4th Edn.) (12) Similarly, the expression reason to believe postulates belief and the existence of reason for that belief. The belief must be held in good faith, it cannot be merely a pretence. (13) In Joti Parshad Vs. State of Haryana [(1993) Supp. (2) SCC 497] , it is observed that: 5. ......... Reason to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shwari and that he had not made any effort to verify the genuineness of the documents and the supplier of goods. The authorized signatory further stated that the supply of goods was on for basis so he did not have any transport documents. And that payment for the goods received under the said documents were made to the broker through the cheques payable at State Bank of India. (15) To verify the correctness of the statement of authorized signatory, the broker Shri Praveen Maheshwari was also summoned and his statement was recorded on 09.01.1998 under Section 14 of 1944 Act wherein he deposed that he neither purchased the goods under GP-1 No.155/08.10.1993, 138/02.10.1993 and 140/05.10.1993 from the respective suppliers nor sold it to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India and others Vs. Dharmendra Textile Processors and others [(2008) 13 SCC 369] and Union of India Vs. Rajasthan Spinning and Weaving Mills [(2009) 13 SCC 448] , formulated the following factors to determine whether mens rea is an essential element of an offence created under a taxing statute viz, (a) the object and Scheme of the Act; (b) the language of the Section; and (c) the nature of penalty. (18) In the case at hand, the penalty under Rule 209A of 1944 Rules is attracted only when it is established that it was within the knowledge and has reason to believe that the excisable goods is not confiscable. The authorized signatory and Director has stated that the material was purchased through broker was on for basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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