Clandestine removal and excise penalties upheld where the record rebutted no demand and hearing absence was unexplained.

Clandestine removal, when unrebutted on the record, supports confirmation of the duty demand and sustains penalties imposed within the scope of the applicable excise penalty rules. The penalty on the company was treated as valid under Rule 173Q(2), and the personal penalty on the managing director was upheld under Rule 209A; the objection based on Section 11AC was rejected because that provision was not invoked. An unexplained failure to attend the personal hearing did not vitiate the order, and no leniency was granted where duty evasion was found.

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Issues: (i) Whether the duty demand was sustainable on the basis of alleged surreptitious removal; (ii) whether the penalties imposed on the company and its managing director were legally sustainable; (iii) whether absence from personal hearing vitiated the order; and (iv) whether leniency was called for in the facts of the case.

Issue (i): Whether the duty demand was sustainable on the basis of alleged surreptitious removal.

Analysis: The record did not disclose any material to dislodge the allegation of clandestine or surreptitious removal made in the show cause notice. The duty demand had therefore been correctly confirmed against the company, and the amount had also been paid.

Conclusion: The duty demand was upheld.

Issue (ii): Whether the penalties imposed on the company and its managing director were legally sustainable.

Analysis: The penalty on the company was imposed under Rule 173Q(2) of the Central Excise Rules, 1944, and was within the limits prescribed by that rule. The personal penalty on the managing director was supported by Rule 209A of the Central Excise Rules, 1944. The objection based on Section 11AC was rejected because the penalty was not imposed under that provision.

Conclusion: The penalties on the company and the managing director were upheld.

Issue (iii): Whether absence from personal hearing vitiated the order.

Analysis: The appellants did not attend the personal hearing and offered no explanation for their absence. In such circumstances, they could not complain that an additional opportunity of hearing ought to have been given.

Conclusion: The challenge based on denial of hearing was rejected.

Issue (iv): Whether leniency was called for in the facts of the case.

Analysis: The matter was treated as a clear case of duty evasion, and no bona fide mistake, ignorance of law, or procedural lapse was shown to justify a softer view. The plea for leniency was therefore not accepted.

Conclusion: No leniency was granted.

Final Conclusion: The confirmed duty demand and the penalties remained undisturbed, and both appeals failed in entirety.

Ratio Decidendi: Where clandestine removal is established or remains unrebutted, confirmed duty and penalties imposed within the scope of the applicable excise penalty provisions will not be interfered with, and an unexplained failure to attend personal hearing does not vitiate the order.

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