TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Company Director Fined Rs. 20 Lakhs for Excise Duty Evasion</h1> The High Court upheld the penalty of Rs. 20 lakhs imposed on the Managing Director of a company for evading Central Excise duty through undervaluation and ... Imposition of penalty - Clandestine manufacture and removal - gross undervaluation of products manufactured and sold - demand based on various gross undervaluation of products manufactured and sold - retraction of statements - Whether the imposition of penalty to the tune of ₹ 20 lakhs on the appellant without any documentary evidence and based on uncorroborated oral statements was proper? HELD THAT:- The orders of the Adjudicating Authority and the Tribunal would indicate that the accounts were examined, statements were recorded and there was finding that the company have resorted to unaccounted raw materials and administrative expenses. There was also evidence of clandestine removal of goods. These were all discernible from documentary evidences and the computer statements recovered on search. Being the Managing Director of the company during the relevant period, the appellant could not have been exonerated from the liability, in view of the evidence, which have been elaborately discussed by the fact finding authorities. The appellant cannot state that he was not aware of the activities of his factory. Retraction of statements given on oath, alone would not exonerate him. There is absolutely no reason for us to re-appreciate the evidence on facts. There is no illegality or infirmity pointed out by the Counsel appearing for the appellant to interfere with the findings on facts by the authorities and the Tribunal. The question of law as framed by us following those raised in the memorandum, is in fact a question of fact. The various documentary evidences and the statements recorded on oath amply prove the clandestine despatch of manufactured goods from the factory leading to suppression and undervaluation. Appeal dismissed. Issues: Allegations of evasion of Central Excise duty, imposition of penalty on the appellant, involvement in undervaluation of products, retraction of statements, evidence of clandestine removal of goods, liability of the Managing Director.In this case, the appellant, as the Managing Director of a company engaged in manufacturing decorative plywood and veneers, was accused of evading Central Excise duty through undervaluation and clandestine clearance of products. A search operation resulted in the seizure of incriminating documents and goods. Show cause notices were issued, and penalties were imposed under relevant Central Excise Rules. The appellant challenged the order before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and subsequently appealed to the High Court.The grounds of appeal asserted that the allegations were based solely on uncorroborated statements without documentary evidence establishing the appellant's personal involvement or knowledge of the undervaluation scheme. In contrast, the respondent-Department contended that evidence seized from various premises indicated the collection of excess amounts beyond bill amounts, with the appellant directly involved in these transactions. The Department alleged a continuous evasion of Central Excise duty over several years until the search operation in 2003.The primary legal issue was whether the imposition of a penalty of Rs. 20 lakhs on the appellant, under Rule 209A of the Central Excise Rules, without documentary evidence but based on oral statements, was justified. The Court examined the evidence, including accounts, statements, and recovered computer data, which revealed unaccounted raw materials, administrative expenses, and clandestine removal of goods. Given the appellant's position as Managing Director during the relevant period, the Court held that he could not be absolved of liability. The retraction of statements was deemed unreliable compared to earlier sworn statements, and employee statements confirmed clandestine activities within the factory.The Court concluded that there was no basis to reassess the factual evidence presented. The appellant failed to demonstrate any legal flaws or irregularities that would warrant overturning the findings of the lower authorities and the Tribunal. The Court emphasized that the documentary evidence and recorded statements sufficiently proved the clandestine removal of goods, suppression, and undervaluation. Consequently, the appeal was dismissed, and no costs were awarded.
TaxTMI 
TaxTMI 
