1998 (7) TMI 303 - AT - Central Excise

Tribunal orders fines for duty evasion scheme; non-compliance risks appeal dismissal. Compliance may waive penalties.

SN. SHARMA Versus COMMISSIONER OF CENTRAL EXCISE, KANPUR

SN. SHARMA Versus COMMISSIONER OF CENTRAL EXCISE, KANPUR - 1999 (109) E.L.T. 619 (Tribunal) Issues:Evasion of duty through manipulation of goods marking; Allegations against individuals for involvement in evasion; Imposition of penalty and waiver requests.Analysis:The case involved allegations of evasion of duty through the manipulation of goods marking, leading to a detailed investigation by Central Excise Officers. The inspection of bales revealed discrepancies where bales marked as Straight Reel (SR) actually contained cotton yarn in Cross Reel (CR) hanks, indicating an attempt to evade duty. The authorities alleged that the Assessee was involved in this manipulation to evade duty, supported by statements and evidence gathered during the investigation.Regarding the involvement of individuals, the Finance Controller and Authorised Signatory, Excise Clerk, Sales Assistant, and the Agents were implicated in the evasion scheme. The Finance Controller was presumed to have knowledge of the company's affairs, including the marking on the yarn bales. The Excise Clerk was responsible for maintaining records, the Sales Assistant had a role in sales, and the Agents were linked to the differently marked bales found in their godown. Each individual was assigned specific duties and roles, contributing to the evasion scheme according to the authorities.In response to the imposition of penalties, various individuals and their representatives made arguments for waiver based on lack of direct involvement or financial hardship. The Finance Controller claimed lack of knowledge or connivance, the Excise Clerk emphasized his minor role and financial difficulties, the Agents were portrayed as independent commission agents, and the Sales Assistant denied any attributed role in the evasion scheme. However, the authorities maintained that detailed investigations had uncovered the involvement of these individuals in the evasion scheme, leading to the imposition of penalties.In the judgment, the Tribunal directed the Finance Controller and the Agents to deposit Rs. 10,000 each, while the Excise Clerk and Sales Assistant were instructed to deposit Rs. 5,000 each. Failure to comply would result in the dismissal of the appeals. Compliance with the deposit requirements would lead to the waiver of the balance of the penalty amount and a stay on recovery during the appeal process. The judgment aimed to address the evasion of duty allegations, individual roles in the scheme, and the imposition and waiver of penalties based on the circumstances presented during the case.