AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (7) TMI 1171
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....dt. 28/12/2008 Rs. 12,17,620/- Rs. 12,17,620/- 3 E/566/2009 466/2008 dt. 28/12/2008 - Rs. 10,000/- 2. Briefly the facts of the present case are that the adjudicating authority vide Order-in-Original has held that the appellant Fancy Bag Industries had manufactured and cleared the impugned goods in the name of M/s. Nikita Plast, Daman without depositing the duty amount to the Government but instead deposited to the bank account of M/s. Nikita Plast. Adjudicating authority vide the Order-in-Original confirmed the demand of Rs. 12,17,620/- (Rupees Twelve Lakhs Seventeen Thousand Six Hundred and Twenty only) towards excise duty on poly bag for the period from 2000-01 to 2005-06 and appropriated Rs. 5,00,000/- (Rupees Five lakhs only) already paid by the Fancy Bag Industries towards duty liability, imposed equivalent penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002, imposed penalty of Rs. 10,000/- (Rupees Ten Thousand only) under Rule 26 of Central Excise Rules, 2002 on Manoj Mehta of Fancy Bag Industries and also imposed penalty of Rs. 10,000/- (Rupees Ten Thousand only) under Rule 26 on M/s. Nikita Plast....
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....ause notice was issued to M/s. Fancy Bag Industries, the proposal for demand of duty was made on Manoj Mehta. However, the impugned order as well as the adjudication order has proceeded to demand duty on M/s. Fancy Bag Industries by going beyond the scope of show-cause notice. For this submission, he relied upon the following decisions: i. CCE, Delhi-I Vs. Hi-Tech Electronics Industries - 2014 (314) ELT 689 (Tri.-Del.) ii. JSEL Securities Ltd. Vs. CCE & ST, Jaipur-I - 2017 (4) GSTL 8 (Tri.-Del.) iii. Preamier Heavy Engineering Corporation Vs. CCE - 2016 (337) E.L.T 332 (Guj.) 2.1. He further submits that the impugned demand has been raised solely on the basis of assumption and presumptions without examining/investigating the facts that when the goods have been received from M/s. Nikita Plast on payment of duty and cleared subsequently, whether the appellant has raised any invoice for the said goods by including the value of the goods. He also submitted that provisions of Section 11D of Central Excise Act 1944 has no application to the facts of the case as even after including the value of clearances made by the appellant in the name of M/s. Nikita Plas....
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....ctually supplying the goods to Bangalore based customers and received the sale proceeds of the fraudulently cleared goods. Further in the impugned order also on the same grounds penalty under Rule 26 of the Central Excise Rules has been imposed whereas prior to 01.03.2007 under Central Excise Law there was no penalty provision for penalizing person, who issues an excise duty invoice without delivery of goods specified therein or abets in making such invoices. He further submits that vide Notification no. 8/2007 dated 01.03.2007 Rule 26 was amended and sub-rule (2) to Rule 26 was inserted to penalize the person who issues an excise duty invoices without delivery of the goods specified therein or abets in making such invoices. The said provision cannot be made applicable retrospectively to the present case so as to penalize the appellant. Further he submits that Rule 26 of the Central Excise Rules, 2002 talks about the personal penalty which can be imposed only on a natural person who knowingly and personally involves in violating the Central Excise provisions and not on any legal/juridical person/entity. In support of this submission, he relied upon the decision of the Larger Bench ....
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....hat in terms of Section 121 of the Customs Act, 1962 to confiscate the sale proceeds, the onus is on the Department to prove that the same relates to clandestinely removed goods, which is required to be discharged by production of an affidavit and tangible and positive evidence which the Department has failed to discharge. For this he has relied upon the decision of the Tribunal in the case of Pandit D.P. Sharma Vs. CCE, Calcutta reported in 2001 (137) E.L.T. 692 (Tri.-Kolkata) wherein the Tribunal by relying upon various decisions has held that the onus to prove that the amount in question is the sale proceeds of the clandestinely removed goods is upon revenue, which is required to be discharged by production of an affirmative tangible and positive evidence. The said decision has been upheld by the Apex Court as reported in 2003 (157) E.L.T. A201 (S.C). He further submits that in the present case the Department has neither caused any verification or investigation nor recorded any statement with regard to the transactions in the frozen account. The said account has not been verified and no statement was recorded. He also relied upon the decision in the case of J.K.S. Air Travels Vs....
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....nents Pvt. Ltd. - 2004 (165) E.L.T. 136 (S.C). 4.1. He further submits that the duty of Rs. 5,00,000/- (Rupees Five Lakhs only) was voluntarily paid during investigation towards the demand which clearly shows that the appellants had admitted the clandestine production and removal of goods. He further submits that the submission of the appellant that the proposal in the show-cause notice is towards the demand of duty on Manoj Mehta but the same has been confirmed on M/s. Fancy Bag Industries is not tenable in law. To counter this, he has submitted that in reply to the show-cause notice, Manoj Mehta has categorically replied that he is appearing on behalf of Fancy Bag Industries and the proprietor Bhupatrai Mehta, father of Manoj Mehta has delegated the management and day-to-day affairs of business to him and he was looking after the whole affairs of the Fancy Bag Industries. Therefore, the duty has rightly been confirmed against the proprietorship concern and penalty has rightly been imposed on Manoj Mehta. With regard to the freezing of accounts of Nikita Plast, the learned AR submits that the very fact that the Nikita Plast has not lodged any criminal complaint against Manoj Me....
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....aman. The entire illegal activity has been done by Manoj Mehta without the knowledge of Nikita Plast. Therefore, I hold that in the impugned order the Commissioner has rightly confirmed the demand against the Fancy Bag Industries and rightly imposed the penalty on Manoj Mehta. As far as appeal of the appellant Nikita Plast is concerned, I find that the activities carried on by Manoj Mehta is without the concurrence of the Nikita Plast and Nikita Plast has no knowledge about the activity of Fancy Bag Industries, Bangalore and they have never asked them to print invoices in their name and clear the goods in their name. Further the imposition of penalty of Rs. 10,000/- (Rupees Ten Thousand only) on the Nikita Plast is not sustainable in view of the ratio decision of the Tribunal in the case of Homag India Pvt. Ltd. cited supra. Further the freezing of the bank account solely on the statement of Manoj Mehta is also not tenable in law. The Department has not caused any verification and investigation nor recorded any statement with regard to the transaction in the frozen account. The entire seizure of account and freezing the same is based on mere presumptions and at the back of the appe....