2016 (11) TMI 40 - AT - Central Excise

Penalty overturned for Geetu Gidwani, upheld for Sanjay Karkare in goods under-valuation case

The penalty imposed on Smt. Geetu S. Gidwani was set aside due to insufficient evidence of her active involvement in the under-valuation of goods. ... Imposition of personal penalties - Rule 26 of the Central Excise Rules, 2002 - under valuation of clandestine removal of goods - Held that: - I do find that the adjudicating authority has attributed a direct role played by Shri Sanjay V. Karkare. The individuals namely Ms. Meena Bhandare, Ms. Bhagyashree Joshi and Shri Ajay Balbhar have categorically stated that Shri Sanjay V. Karkare was directing them to manipulate and to record the transactions in respect of sales of the Company. I am not convinced that Shri Sanjay V. Karkare has any case in his favour in respect of non-imposition of any penalties. Accordingly in the facts and circumstances of the case, I hold that the penalty of ₹ 1,00,000/- under the provisions of Rule 26 of CER, 2002 is correctly imposed - appeal rejected. Imposition of penalties on Mrs. Geetu S. Gidwani - undervaluation of clandestine removal of goods - Held that: - there is nothing on record to indicate Mrs. Geetu S. Gidwani had played any active role in such under-valuation of clandestine removal of the goods nor the adjudicating authority has indicated any reason for imposing penalty on appellant, hence the penalty imposed on Mrs. Geetu S. Gidwani is liable to be set aside - appeal allowed. Appeal disposed off - decided partly in favor of appellant. Issues: Penalty imposition on Smt. Geetu S. Gidwani and Shri Sanjay V. Karkare under Rule 26 of the Central Excise Rules, 2002.Analysis:1. Penalty on Smt. Geetu S. Gidwani:- The adjudicating authority imposed a penalty on Smt. Geetu S. Gidwani for under-valuation of goods.- The appellant argued that there was no evidence of her active involvement in the under-valuation.- Upon review, it was found that there was no record indicating her active role in the under-valuation.- The penalty on Smt. Geetu S. Gidwani was deemed unwarranted and set aside.2. Penalty on Shri Sanjay V. Karkare:- The adjudicating authority imposed a penalty on Shri Sanjay V. Karkare based on statements from individuals involved in the case.- The appellant argued that he was not a director during the relevant period and that no one mentioned his involvement in the clandestine removal of goods during cross-examination.- However, the statements of Ms. Meena Bhandare, Ms. Bhagyashree Joshi, and Shri Ajay Balbhar implicated Shri Sanjay V. Karkare in directing the under-valuation and manipulation of transactions.- The adjudicating authority found a direct role played by Shri Sanjay V. Karkare based on these statements.- Despite the appellant's arguments, the penalty of &8377; 1,00,000 under Rule 26 of the Central Excise Rules, 2002 was upheld as there was convincing evidence of his involvement.3. Conclusion:- The penalty on Smt. Geetu S. Gidwani was set aside due to lack of evidence of her active role in the under-valuation.- In contrast, the penalty on Shri Sanjay V. Karkare was upheld based on statements indicating his direct involvement in the clandestine removal of goods.- The appeals were disposed of accordingly, with the penalty on Shri Sanjay V. Karkare being upheld.