Tribunal Upholds Duty Evasion Penalty on Pragati Industries, Varies Penalties for Employees

The Tribunal upheld the findings of clandestine removal of goods without payment of duty by M/s. Pragati Industries, imposing a penalty of Rs. 40 lakhs under Section 11AC of CEA, 1944. The penalty imposed on the proprietor was set aside, while penalties on the supervisor and clerk were reduced. The appeals were disposed of on 3-7-2009.

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Issues involved: Clandestine removal of goods without payment of duty, imposition of penalty on the appellants.

Summary:
1. The case involved the clandestine removal of goods without payment of duty by M/s. Pragati Industries, as evidenced by the recovery of pocket diaries showing illicit clearances.

2. Statements of the proprietor, supervisor, and clerk of the unit admitted to the clandestine clearances, supported by corroborative evidence from buyers who confirmed receiving goods without proper invoices.

3. The Commissioner initiated proceedings resulting in a demand of duty and penalty amounting to Rs. 50,75,400/- against M/s. Pragati Industries.

4. The appellant challenged the order on the grounds of lack of access to documents for representation, but the Tribunal found no merit in the argument as the appellant was provided with all necessary documents and opportunities for hearings.

5. The Tribunal upheld the findings of clandestine removal based on the evidence, confirming the duty demand and imposing a penalty of Rs. 40 lakhs under Section 11AC of CEA, 1944 on M/s. Pragati Industries.

6. The penalty of Rs. 10 lakhs imposed on the proprietor was set aside as separate penalties on the unit and its proprietor cannot be imposed as per settled law.

7. Penalties of Rs. 1 lakh each imposed on the supervisor and clerk were reduced to Rs. 10,000/- each considering their roles as employees following directions of the proprietor.

8. The appeals were disposed of with the above decisions pronounced on 3-7-2009.

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