Appeal outcome: Vraj Packaging appeal partly allowed, MD appeal rejected. Tribunal upholds demand & penalties.

The appeal of M/s Vraj Packaging Pvt. Ltd. was partly allowed, while the appeal of the Managing Director, Shri S.K. Babaria, was rejected. The Tribunal confirmed the demand and penalties imposed on the company, emphasizing the reliance on statements made during the panchanama where employees and buyers admitted to clearing bags as waste and making excess cash payments. The Tribunal extended the option to pay 25% of the penalty in accordance with the Central Excise Act.

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Issues:
Confirmation of demand and imposition of penalties, Assessment of rejected bags, Reliance on statements made during panchanama, Role of Managing Director, Extension of option to pay 25% penalty.

Confirmation of demand and imposition of penalties:
The appeals were filed against the confirmation of demand and penalties imposed on M/s Vraj Packaging Pvt. Ltd. and Shri Sharad K Babaria. The appellant argued that rejected bags cannot be assessed based on the value of bags. Statements made during the panchanama were relied upon by the Revenue, but the Managing Director disagreed with these statements. Statements of buyers indicated payments made in cash exceeding invoice values. The Managing Director agreed to pay the duty but did not agree with the contents of the statements, paying only to buy peace.

Assessment of rejected bags:
The Revenue found that the appellants were clearing rejected HDPE bags at low prices. Statements of employees and buyers suggested that bags were cleared as waste, with payments made in cash exceeding invoice values. The Revenue argued that even plastic waste is more valuable than the prices declared by the appellant. The Tribunal found merit in the impugned order due to the lack of retractions from the statements of buyers and employees.

Reliance on statements made during panchanama:
The Revenue relied on statements made during the panchanama, where employees and buyers admitted to clearing bags in the guise of waste and making excess cash payments. The Managing Director did not contradict these statements, leading to the Tribunal finding merit in the impugned order.

Role of Managing Director:
The Managing Director claimed no express role in the case. However, substantial quantities of materials were cleared as scrap, with cash payments received. The Tribunal noted that the role of the Managing Director cannot be ruled out in these circumstances.

Extension of option to pay 25% penalty:
The appellant raised a contention regarding the failure to extend the option to pay 25% of the penalty in the Order-in-Original. The Tribunal extended this option in accordance with Section 11AC of the Central Excise Act, 1944.

In conclusion, the appeal of M/s Vraj Packaging Pvt. Ltd. was partly allowed, while the appeal of the Managing Director, Shri S.K. Babaria, was rejected.

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