Imposition of penalty when charge of clandestine admitted.

PJ/Case Law/2014-15/2354

Case:- LAWN TEXTILE MILLS PVT. LTD. Vs COMMISSIONER OF C. EX., SALEM

Citation:- 2013 (297) E.L.T. 561 (Tri. - Chennai)

Brief facts:- The appellants were in appeal against the impugned order where demand of duty of Rs. 1,97,698/- had been confirmed along with interest which could be reduced to 25% if the same was paid within a period of 30 days from the date of receipt of the order.
The facts of the case were that, on visit to the factory of the appellants on 9-1-2003, it was found that the appellant was clearing the goods without payment of duty. Five brown colour chits were recovered from the factory of the appellants for clearance of goods without payment of duty. A statement of Shri S. Mani, who was Accountant and looking after Central Excise matters, was also recorded. In the statement, Shri Mani had admitted that the bags mentioned in brown colour chits were cleared without invoice and without payment of duty of Central Excise. Thereafter, a case was made out against the appellant. A SCN was issued and a demand mentioned herein above was confirmed against them. The appellants were in appeal against the above said impugned order.

Appellant’s contentions:- The learned counsel for the appellant contended that while quantifying the duty, no details of the goods, i.e. description, rate, quantity and value were shown to them. Moreover, no corroborative evidence had been brought on record. To support his contention, he relied on the decision of this Tribunal in the case of Monarch (I) Pvt. Ltd. v. Commissioner - 2006 (197) E.L.T. 396 (Tri.-Kolkata).

Respondent’s contentions:- On the other hand, learned SDR opposed the contention of the learned counsel and submitted that this case was made out on the basis of investigation conducted at the premises of the appellant on 9-1-2003, and on the basis of the statement recorded. It was the admission by the appellant themselves that they have cleared the goods without payment of duty. Therefore, no further evidence was required.

Reasoning of judgment:- The Hon’ble judge had gone through the statement recorded by the department on 9-1-2003 of Shri S. Mani, Accountant of the appellant wherein he had clearly admitted the five numbers of brown chits and details contained therein and that the bags mentioned in the brown chits were cleared without invoice and without payment of duty of Central Excise. In that set of facts, no more evidence was required by Revenue as the said statement had not been retracted by the appellant at any stage of adjudication or further. That statement was a voluntary statement given by the Accountant of the appellant-company. In view of these observations, the case law relied upon by the learned counsel was not relevant to the facts of this case. Therefore, he did not find any infirmity with the impugned order. Same was upheld. As the appellant had paid the duty before issuance of the SCN, and there was no quantification of the interest, in that view the penalty was reduced to 25%. Appeal was disposed off in the above terms.

Decision:- Appeal partly allowed.

Comment:- The essence of this case is that when the allegation of clandestine clearance has been accepted, no waiver from penalty could be granted. However, the benefit of reduced penalty should be extended to the assessee.

Prepared by: Ranu Dhoot

Comments

PJ/Case Law/2014-15/2354

Post a Comment

Query