Appellant company allowed to sell plot for duty payment, penalties waived, modified duty amount computed.

The Tribunal allowed the appellant company to sell its industrial plot to pay Central Excise duty, directing the sale proceeds to be used for duty liability. The duty demand was adjusted based on duty paid by suppliers, with penalties on directors/managers set aside. Duty on trading activities was not imposed, and penalties on individuals were waived. The Commissioner was directed to compute the modified duty amount, reducing penalties accordingly, with an option to pay within one month. The company could sell assets to meet duty liability, and all appeals were disposed of.

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Issues Involved:
1. Issuance of 'No Objection Certificate' for selling industrial plot.
2. Demand of Central Excise duty based on resumed documents and tally data.
3. Violation of principles of natural justice.
4. Adjustment of duty liability based on duty paid by suppliers.
5. Demand of duty on trading activities.
6. Imposition of penalties on the company and its directors/managers.

Issue-wise Detailed Analysis:

1. Issuance of 'No Objection Certificate' for Selling Industrial Plot:
The appellant company requested a direction to the lower authorities to issue a 'No Objection Certificate' to sell its industrial plot to pay the Central Excise duty. The request was initially denied by the adjudicating authority. The Tribunal allowed the appellant to dispose of the land and building, plant, and machinery, directing that the sale proceeds first be used to deposit the duty liability and applicable penalty.

2. Demand of Central Excise Duty Based on Resumed Documents and Tally Data:
The duty demand of Rs. 3,00,18,268/- was based on the difference between the sale value shown in the Central Excise Records and the tally data recovered from the appellant's computer. The Tribunal noted that the appellant was willing to pay the duty demandable from them but contended that the duty already paid by their suppliers should be adjusted against their liability.

3. Violation of Principles of Natural Justice:
The appellant argued that the impugned order violated the principles of natural justice as cross-examination of witnesses was not allowed, and the enquiry from all suppliers and buyers was not conducted. However, since the appellant was willing to pay the duty, the Tribunal did not consider these contentions.

4. Adjustment of Duty Liability Based on Duty Paid by Suppliers:
The appellant contended that the duty liability should be reduced by the amount already deposited by their suppliers. The Tribunal agreed, stating that the duty liability of the appellant company should be reduced by the amount of duty already deposited by the suppliers. However, if the duty had only been confirmed and not deposited by the suppliers, such amounts could not be deducted at this stage. The Tribunal allowed for future refunds if the suppliers deposited the duty.

5. Demand of Duty on Trading Activities:
The appellant argued that they purchased M.S. Flats and Miss Rolls from the market and sold them without any manufacturing activity, and thus no duty should be demanded on these transactions. The Tribunal agreed, noting that the resumed records clearly showed the purchase and sale of M.S. Flats and Miss Rolls as such, and there was no evidence that these were used in manufacturing other products. Consequently, the duty on these items was not demandable from the appellant company.

6. Imposition of Penalties on the Company and Its Directors/Managers:
The Tribunal found that a penalty on the appellant company was imposable under Section 11AC of the Central Excise Act for removing finished goods without payment of duty. However, it agreed that separate penalties on directors and managers were not warranted once the company was penalized. The penalties on all directors, the former director, and the manager were set aside. The Tribunal also noted that the manager was merely an employee following company directions and had gained nothing personally.

Conclusion:
The Tribunal allowed the appeals by way of remand, directing the Commissioner to compute the duty amount payable by the appellant company as modified in the order and to communicate the same. The penalty under Section 11AC would be reduced equivalent to the duty amount now payable, with an option to pay duty, interest, and reduced penalty within one month. The appellant company was also allowed to sell its assets to meet the duty liability. All appeals and the miscellaneous application were disposed of accordingly.

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