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of <h1>Tribunal Upholds Department's Appeals, Imposes Penalties for Unaccounted Goods</h1> <h3>C.C.E. & C., Indore Versus M/s. S.K. Industries, Shri Sunil Kumar Jain, Partner, Shri Suresh Kumar Jain, Manager, Shri Jagdish Singh Rana, Prop. M/s Parasnath Traders, Shri Hari Krishna Aggarwal, Manager, M/s Motor Transport of India (P) Ltd.</h3> The Tribunal upheld the Department's appeals, confirming the duty demand of Rs. 6,99,31,440/- along with interest, and imposed penalties on the involved ... Clandestine removal - unaccounted manufacture - very few evidences available - preponderance of probability and not mathematical precision - Held that: - the activities like unaccounted production and clandestine removal without payment of due taxes to the National Exchequer gravely hurts the economy of the Nation, and cannot, therefore, be taken lightly. Whenever the perpetrators of such offences get caught, such evils and evil doers are to be tackled and combated effectively by applying the relevant laws and by taking the law and law enforcement to their logical conclusion. However, it does not mean that offenders could be booked without evidences. In fact, when there is no evidence, there is no offence and no offender - The point is that when such evil activities are done in utter secrecy and in an organized manner, there would be only very few evidences available; therefore, whenever such a few evidences are available, the inferences have to be made out of those evidences on the yardstick of preponderance of probability and offenders are to be strictly dealt with accordingly. The appeals where, allowance are made, the matter is remanded to Commissioner, who shall take decision afresh - appeal allowed by way of remand. Issues Involved:1. Unaccounted manufacture and clandestine removal of goods.2. Refund claim of Rs. 6 lakhs.3. Interest on the refund amount.4. Penalties on individuals involved.Issue-wise Detailed Analysis:1. Unaccounted Manufacture and Clandestine Removal of Goods:The Department filed seven appeals, primarily challenging the adjudication order dated 30.06.2004, which dropped a demand of Rs. 6,99,31,414/- against the respondents. The case originated from a Show Cause Notice dated 26.02.1998, issued after the interception of two mini trucks carrying gutkha/pan masala of Mahak brand without payment of duty. The trucks were seized, and the duty liability of Rs. 5,57,640/- was paid by the respondents. The Commissioner initially confirmed the duty demand and imposed penalties, but on subsequent appeals and remands, the demand was dropped. The Department argued that the respondents were involved in clandestine manufacturing and clearance of goods without payment of duty, supported by various evidences such as transport challans, statements of involved persons, and other circumstantial evidence. The Tribunal found sufficient evidence to support the Department's case and concluded that the respondents were involved in unaccounted manufacture and clandestine removal of goods, thereby sustaining the demand of Rs. 6,99,31,440/- along with interest and imposing penalties on the involved individuals.2. Refund Claim of Rs. 6 Lakhs:The refund claim for Rs. 6 lakhs, paid by the respondents against the duty liability, was initially rejected by the Deputy Commissioner but was later allowed by the Commissioner (Appeals). The Department appealed against this order. The Tribunal, considering the main appeal against the adjudication order dated 30.06.2004, decided to remand the matter back to the Commissioner (Appeals) for a fresh decision based on the Tribunal's findings in the main appeal.3. Interest on the Refund Amount:The respondents were granted interest on the refund amount of Rs. 6 lakhs by the Commissioner (Appeals), which was challenged by the Department. The Tribunal remanded this issue back to the Commissioner (Appeals) for a fresh decision in light of the Tribunal's findings in the main appeal.4. Penalties on Individuals Involved:Penalties were imposed on various individuals involved in the clandestine activities:- Sunil Kumar Jain, partner of M/s S.K. Industries, was imposed a penalty of Rs. 5 lakhs for his role in the evasion of central excise duty.- Suresh Kumar Jain, Manager of M/s S.K. Industries, was also imposed a penalty of Rs. 5 lakhs for his involvement.- Jagdish Singh Rana, proprietor of M/s Parasnath Traders, was imposed a penalty of Rs. 1 lakh for assisting in the evasion.- Hari Krishna Agrawal, Manager of Motor Transport of India Pvt. Ltd., was imposed a penalty of Rs. 50,000/- for his involvement.Conclusion:The Tribunal upheld the Department's appeals, confirming the duty demand of Rs. 6,99,31,440/- along with interest, and imposed penalties on the involved individuals. The matters related to the refund claim and interest were remanded back to the Commissioner (Appeals) for fresh adjudication based on the Tribunal's findings. The Tribunal emphasized the importance of combating economic offences like tax evasion effectively.
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