2016 (12) TMI 774 - AT - Central Excise

Adjudication order upholds penalty for excise duty evasion, Managing Director partly successful.

M/s. Selvakumar Spinners Pvt. Ltd. Versus Commissioner of Customs, Central Excise and Service Tax, Salem

M/s. Selvakumar Spinners Pvt. Ltd. Versus Commissioner of Customs, Central Excise and Service Tax, Salem - TMI Issues:1. Examination of incriminating evidences for evasion of excise duty2. Contention of appellant regarding questionable modus operandi and penalty imposition3. Evaluation of evidences and clandestine removal by authorities4. Rigorous testing of evidence by adjudicating authority5. Oblique motive and intention to cause evasion by the appellant6. Concession in penalty by the adjudicating authority7. Corroboration of modus operandi by evidence from three persons8. Upholding the impugned order for the appellant company9. Penalty imposition on the Managing Director for conscious involvement in evasion10. Justification of penalty on the Managing DirectorAnalysis:1. The adjudication order extensively analyzed incriminating evidences related to the evasion of excise duty amounting to Rs. 12,60,279. The authority thoroughly examined the modus operandi followed by the appellant, evaluating implications and relative evidences gathered. Positive findings were made, establishing evasion based on the evidence presented.2. The appellant contended that there was no questionable modus operandi involved and that the case lacked a basis of evidence. The penalty imposed on the Managing Director was challenged, stating his passive role in the evasion. Revenue supported the adjudication, emphasizing the lack of corroborative evidence to refute the modus operandi followed by the appellant.3. The authorities below evaluated the evidences of clandestine removal, leading to the establishment of evasion. Both sides presented their arguments, and the appeals were considered for dismissal based on the evidence and contentions presented.4. The adjudicating authority rigorously tested the strength of the evidence, highlighting the appellant's intention to cause evasion. Physical removals of goods without duty payment and unaccounted transactions were identified, with no substantial evidence presented by the appellant to counter the findings.5. The adjudication order demonstrated a meticulous consideration of the case, aiming to reduce litigation. The authority extended a concession in penalty under section 11 AC of the Central Excise Act, 1944, based on the evidence and circumstances presented.6. Evidence gathered from three individuals corroborated the appellant's questionable modus operandi, indicating a loss of revenue. The authority upheld the impugned order concerning the appellant company based on the lack of rebuttal evidence.7. Regarding the penalty on the Managing Director, the adjudicating authority presumed conscious involvement in the evasion. Despite the lack of concrete evidence, a penalty of Rs. 50,000 was imposed, considering the totality of facts, extent of evasion, and human intervention in the evasion process.8. The judgment concluded by partly allowing the appeal of the Managing Director and dismissing the appeal of the company, based on the findings and considerations presented during the case proceedings.