AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 722
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....t, through DGCEI, initiated investigation through simultaneous search on 21.01.2008 of the premises of: i. M/s Cosmo International (Shri Ashok Jain, Proprietor). ii. M/s Riemer Cosmetics (Shri Vikas Jain, Proprietor). iii. M/s Max Fair India ( Shri Parvesh Jain, Brother-in-Law of Shri Ashok Jain). 2. All the above firms were manufacturing cosmetic products and selling them through various trading firms, prominent among them being: a) M/s Babu Di Fancy Hatti and M/s D.D. Brothers, both proprietor Shri Darshan Lal. b) M/s Jainico Traders whose proprietor is Shri Sanjay Jain. 3. Searches were also conducted, in addition to the factory premises at various other premises including those of trade....
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....department alleged that Shri Ashok Jain had got cosmetics manufactured through three dummy units, which were purchasing raw materials as well as selling final products without payment of duty in cash. Further, it was alleged that even in respect of goods, which were accounted and invoiced, the goods were shown as sold at MRP's, which were very depressed. 3. In line with the above, the Show Cause Notice demanded Central Excise duty amounting to Rs. 4,81,45,644/- along with a proposal to levy interest as well as penalty of an equal amount. The duty demand as well as imposition of penalties was confirmed in the impugned order. In addition, penalties of various amounts were imposed on several persons. In respect of the three appellants, the ....
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....co Traders made the following submissions: "So far as imposition of Penalty on M/s. Jainco Traders is concerned, they had purchased the goods from M/s. Cosmo, M/s. Riemer and M/s. Max under proper invoices and the goods were duly accounted in their books of accounts. The appellant had no knowledge that M/s. Cosmo, M/s. Riemer and M/s. Max were wrongly availing the SSI exemption. The allegation of knowledge on the part of the appellant of the duty evasion by the manufacturer is without basis. Therefore, there is no justification for penalty on M/s. Jainco Traders under Rule 26 of the Central Excise Rules, 2002". 7. Shri Harish Kohli, Ld. Counsel representing Shri Pravesh Jain, Proprietor, M/s Max submitted that imposition of pena....
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.... to BDFH, he submitted that the contents of the ledger book recovered from the premises of BDFH and the spiral note book recovered from the factory premises of M/s Max tally with each other and have been further corroborated by the statements of Shri Darshan Lal, Proprietor as well as Shri Parvesh Jain. During the period 01.06.2003 to 21.01.2008 goods from all the three manufacturing firms involving Central Excise duty of nearly Rs. 3.5 crores have been cleared clandestinely by Shri Ashok Jain to BDFH and DD brothers. Since, it is established that BDFH and D.D. Brothers have been party to the evasion of Central Excise duty, penalty imposed is fully justified. 9. With reference to M/s Jainico traders, he submitted that Shri Sanjay Jain, P....
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.... sold through BDFH. Shri Darshan Lal, the common Proprietor of M/s BDFH and M/s D.D. Brothers admitted in his statement dated 21.01.2008 that he was regularly purchasing cosmetics from Shri Ashok Jain both under bills and without bills. In respect of goods purchased without bills, payments were settled in cash and for goods purchased with bills, payments were settled by cheque. Statement of Shri Darshan Lal has never been retracted. From the premises of M/s BDFH ledger book has been recovered giving details of the goods procured from Shri Ashok Jain with and without bills. These were found to tally with a spiral notebook recovered from the premises of M/s. Max and have further been corroborated by the statements of Shri Darshan Lal and Parv....
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....sons, I find that the penalty imposed on BDFH by the adjudicating authority is fully justified and merits no interference. 15. A penalty of Rs. 50,000/- has been imposed on Jainico traders, Proprietor Shri Sanjay Jain. Shri Sanjay Jain, Partner has admitted that they were purchasing goods from Shri Ashok Jain both with bills and without bills every month. Further, goods were seized from their premises which were cleared without payment of duty. In view of the above, the penalty imposed under Rule 26 is fully justified and merits no interference. 16. A penalty of Rs. 1 lakh has been imposed on Shri Parvesh Jain, who was the Proprietor of M/s Max. The investigation has established that during the relevant period, goods worth nearly Rs. ....