Tribunal Upholds Penalties for Misrepresentation of Goods

The Appellate Tribunal CEGAT, New Delhi upheld the imposition of penalties on appellants for clearing laminations clandestinely as CRGO Rolls and Torridel Core. The Tribunal found no infirmity in the impugned orders and modified the penalty amount to Rs. 25,000 in each case. The appeals were dismissed based on statements from customers and appellants confirming the misrepresentation of goods, leading to the penalty imposition.

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Issues: Allegation of clearing clandestinely laminations as CRGO Rolls and Torridel Core, confirmation of duty demand, imposition of penalty, contention of appellants regarding import and sale of steel sheet rolls, statements of customers and appellants, infirmity in impugned orders, modification of penalty amount.

The appeals before the Appellate Tribunal CEGAT, New Delhi involved the common issue of the allegation against the appellants that they cleared clandestinely laminations under the guise of CRGO Rolls and Torridel Core. Multiple appeals were filed by different entities challenging the confirmation of duty demand and imposition of penalties. The brief facts of the case revealed that the appellants were found engaged in the manufacture of electrical laminations, which led to the issuance of show cause notices for demand of duty and imposition of penalties under relevant excise rules. The appellants contended that they imported Cold rolled grain steel sheet (CRGO) and Cold rolled non-grain oriented steel sheet rolls for manufacturing electrical laminations and sold some of the imported rolls after slitting to customers who were lamination manufacturers not importing such sheets.

During the proceedings, the Revenue argued that M/s. Indcoil Manufacturing Co. was a customer of all the appellants and confirmed that they purchased laminations in coil and strip form from the appellants. Statements from the Managing Partner of M/s. Indcoil Manufacturing Co. and authorized representatives of the appellants were relied upon to support the allegations. The statements indicated that the appellants supplied laminations to customers under the guise of CRGO rolls, as admitted by various partners and proprietors of the appellant firms. They acknowledged that the goods supplied were indeed laminations despite being described as CRGO rolls in the invoices.

After considering the statements of the customers and appellants, the Tribunal found no infirmity in the impugned orders. Consequently, the Tribunal modified the penalty amount to Rs. 25,000 in each case, taking into account the duty involved and the circumstances. The impugned orders were upheld with the penalty reduction. The appeals were dismissed based on the findings of the statements provided by the customers and appellants, confirming the clandestine clearance of laminations as CRGO rolls and Torridel Core, leading to the imposition of penalties.

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