2017 (12) TMI 441 - AT - Central Excise

Tribunal upholds duty demand & penalties on M/s. A.N. Manufacturing Pvt. Ltd. for production suppression. Director faces personal penalty.

The Tribunal upheld the duty demand of Rs. 10,79,280 and penalties imposed on M/s. A.N. Manufacturing Pvt. Ltd. for suppression of production and ... Clandestine production and removal - Held that: - Shri Rakesh Kumar Gupta, Director of the appellant company vide his statement dated 16.08.2012 had admitted shortage of the finished goods and non-issuance of invoices for removal of the goods. Further, the Department also recovered 7 numbers of invoices belonging to the appellant for clearance of 105 M.T. of excisable goods from the factory. Since the appellant has not provided any plausible evidence against the charges levelled by the Department and more particularly, statement furnished before the Departmental officers was not retracted by the appellant, the adjudged demand confirmed against the appellant is not proper and justified - appeal dismissed - decided against appellant. Issues:- Alleged suppression of production and clandestine removal of finished products without payment of Central Excise duty.- Confirmation of duty demand and imposition of penalties.- Personal penalty imposed on the Director of the appellant company.Analysis:1. Alleged Suppression of Production and Clandestine Removal:The case involved M/s. A.N. Manufacturing Pvt. Ltd., a Central Excise assessee engaged in manufacturing PVC compound/PVC granules. The Department found evidence of suppression and clandestine removal of goods without payment of duty. The appellant was accused of clearing goods without valid invoices and duty payment. The Department confirmed a duty demand of Rs. 10,79,280 along with penalties. The appellant's Director admitted to shortages and non-issuance of invoices, supporting the Department's claims. Despite the lack of evidence from the appellant to refute the charges, the Tribunal found the demand justified and dismissed the appeal.2. Confirmation of Duty Demand and Penalties:The Department proceeded against the appellant for confirming the duty demand and imposing penalties due to the alleged irregularities in production and removal of goods. The adjudged demand of Rs. 10,79,280 was upheld by the Commissioner (Appeals). However, upon review, the Tribunal found the charges substantiated based on the Director's admission and recovered invoices. The lack of evidence or retraction of statements by the appellant led to the dismissal of the appeal, affirming the duty demand and penalties imposed.3. Personal Penalty on Director:In addition to the duty demand and penalties on the company, a personal penalty of Rs. 2,00,000 was imposed on Shri Rakesh Kumar Gupta, the Director of the appellant company. The Tribunal's decision to dismiss the appeal indicates that the personal penalty on the Director was likely upheld along with the other charges. The lack of evidence or challenge to the Department's findings contributed to the affirmation of penalties, including the personal liability of the Director.In conclusion, the Tribunal's judgment in this case revolved around the alleged suppression of production, clandestine removal of goods, confirmation of duty demand, imposition of penalties, and the personal liability of the Director. The decision highlighted the importance of providing substantial evidence to challenge Departmental findings and the consequences of non-compliance with Central Excise regulations.