TaxTMI 
TaxTMI 
2007 (4) TMI 91
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....shares 3. R. Rajendran, Director Son of S. No. 1 46.00 4. R. Balakrishnan Director Son of S. No. 1 58.00 5. R. Thiruvasagam, Director Son of S. No. 1 46.00 6. S. Leelavathi, Director Wife of S. No. 2 30.00 7. R. Rajammal, Director Wife of S. No. 1 10.00 8. B. Kalavathy, Director Wife of S. No. 3 40.00 9. B. Rajamani, Director Wife of S. No. 4 40.00 10. T. Karunambigai, Director Wife of S. No 5 40.00 S. No. Directors of Raju Rajammal Textiles Pvt. Ltd. S/Shri/Smt. Relationship Value of shares held Rs. Lakhs Remarks 1. R. Rajenddran Son of P. Raju 2.50 25% 2. R. Balakrishnan Son of P. Raju 2.50 25% 3. R. Thiruvasagam Son of P. Raju 2.50 25% 4. Smt. Leelavathi Wife of P. Subramanian (MD of Good will Textiles Ltd.) 2.50 25% 5. K. Venkatasubramanian Not related Nil These two Directors were included in the Board of Directors w.e.f. 10-2000 (sic) 6. S. Sankaralingam Not related Nil On 1-8-2001, officers of Central Excise seized 131 bags of 2/40s cones from the premises of M/s. Gold....
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....f Rs. 27,05,488/-] against M/s. Goodwill and adjusting the duty amount of Rs. 3,08,000/- already paid towards the latter demand; (iv) Demanding interest on duty till date of payment; (v) Imposing total penalty of Rs. 43,45,355/- on M/s. Goodwill under Section 11AC of the Act; and (vi) Imposing the following penalties under Rule 209A of the Central Excise Rules, 1944 / Rule 26 of the Central Excise Rules, 2002 on the other noticees. S. No. Name S/Shri / M/s. Appellants in Appeal No. Amount of Penalty Rs. 1. P. Subramanian, MD, GWT E/993/2005 1,00,000 2. R. Rajendran, Director, RRT & GWT E/994/2005 75,000 3. R. Balakrishnan, Director, RRT & GWT E/995/2005 75,000 4. R. Thiruvasagam, Director, RRT & GWT E/996/2005 75,000 5. K.P. Rajagopal, Administrative Officer cum Authorized Agent of GWT E/997/2005 25,000 6. RRT E/998/2005 20,000 7. Global Yarn Spinners E/999/2005 20,000 8. R. Thavasinathan, Sales Representative of RRT E/1000/2005 10,000 9. Golden Dye House E/1001 /2005 20,000 2. The appeals filed by the aggrieved parties against the decision of the orig....
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....001 /2002 on three partners of M/s. Global, an employee of M/s. Global, M/s. RRT, M/s. Golden Dye House and a few others. In adjudication of this notice, the original authority passed order dated 7-3-2005: (i) confirming demand of duty of Rs. 9,73,063/- against M/s. Global for the period 11-10-99 and 31-8-2001 in respect of cone yarn found to have been clandestinely cleared to M/s. RRT; (ii) confirming demand of duty of Rs. 1,99,927/- against M/s. Global for the same period as differential duty on account of relationship found between them and M/s. RRT; (iii) demanding interest on the above duty amounts under Section 11AB of the Act; (iv) imposing penalty equal to duty on M/s. Global under Section 11AC of the Act; and (v) imposing penalties under Rule 209A/Rule 26 on M/s. RRT, M/s. Golden Dye House and a few others. In appeals filed by the aggrieved parties, learned Commissioner (Appeals) affirmed the decision of the lower authority. The order of the appellate Commissioner has been challenged before us in Appeal Nos. E/989/2005 [by M/s. Global], E/990/2005 [by M/s. RRT] and E/991/2005 [by M/s. Golden Dye House]. 4. After examining the records and hearing both s....
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....ce No. 236 dated 30-7-2001 and Invoice No. 240 dated 31-7-2001, seized from the premises of M/s. Golden Dye House, was conceded by them before the lower appellate authority. M/s. Good will admitted having removed the above cone yarn (dutiable) in the guise of hank yarn (exempted) without payment of duty, to M/s. Golden Dye House. Both the above invoices had indicated removal of hank yarn, but the goods actually removed thereunder and seized by the department was cone yarn. In the face of the documentary evidence, the Managing Director, Directors, Administrative Officer and Factory Manager of M/s. Goodwill admitted the clandestine removal in their respective statements. We, further, note that the statement of Shri S. Pandiyan, driver of M/s. Goodwill also contains crucial evidence against the company. He stated that he had transported cotton yarn from M/s. Goodwill's factory-gate directly to buyers and effected door delivery of the goods. The buyers stated that they had purchased 2/40s cone yarn from M/s. Goodwill. Most of them reiterated this statement when cross-examined. Statements of a few brokers were also to the same effect. M/s. RRT also stated that they had sold only cone ya....
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....y and four of them held 100% shares in M/s. RRT. These four Directors of M/s. RRT held more than 93% of the shares of M/s. Global. In the impugned order, learned Commissioner (Appeals) found M/s. RRT to be, 'related' to M/s. Global in terms of Section 4(4)(c) for the period up to 1-7-2000 and in terms of Section 4(3)(b) for the subsequent period and accordingly sustained the demand of differential duty of Rs. 1,99,927/- against M/s. Global. M/s. Global have conceded the 'relationship' and this duty liability. We have already noted that they admitted having clandestinely removed 131 bags of 2/40s cone yarn to their sister concern viz. M/s. Golden Dye House. They paid the duty of Rs. 60,844/- on the said quantity of yam also. There is no surviving dispute in this connection. 7. On the basis of 'relationship' found between M/s. Goodwill and M/s. RRT under Section 4(4)(c) /4(3)(b), there is a demand of duty of over Rs. 24.70 lakhs on the former for the period of dispute. Learned counsel for the appellants argued that there was no evidence of mutuality of business interest between M/s. Goodwill and M/s. RRT and therefore the latter was not to be held to be 'related' to the former in ....