P.D. TULSIYAN AND SONS Vs. CCE

JUDGEMENT

(1.) This appeal filed by M/s P.O. Tulsiyan and Sons is against the Order No. 35/Commr/MP/2001 dated 31.12.2001 of the Commissioner of Central Excise, Kanpur, whereby the adjudicating authority inter alia imposed a penalty of Rs. 1 lakh on the appellants under Rule 209 -A of the Central Excise Rules, 1944. By the said order, the Commissioner imposed varying penalties under the said Rule on several other persons also. All these penalties are based on a common finding that the persons concerned had actively been involved in facilitating clandestine removal of Sulphuric Acid from the factory of M/s Trimurti Fertilizers Ltd (M/s TFL, for short), against whom a demand of Central Excise duty of over Rs. 92 lakhs has been confirmed and a penalty of equal amount imposed. The impugned order was passed in adjudication of a show -cause notice dated 14.10.99 issued to M/s TFL and others on the basis of the results of investigations conducted since 14.10.97.

(2.) On 14.10.1997, separate teams of officers of Central Excise had visited the factory of M/s TFL and the business premises of the appellants and conducted search in which certain records were recovered. It appeared that M/s TFL were engaged in the manufacture of Sulphuric Acid (a dutiable product) and Single Super Phosphate (exempt from duty) while another company viz. M/s Pokhrayan Alum and Chemicals (P) Ltd. in the same premises were engaged in the manufacture of Sulphuric Acid and Ferric Alum. It further appeared from the records recovered from the two premises and the statements of some functionaries of the two companies as well as of Shri Neeraj Kumar Tulsiyan, son of Shri P.D. Tulsiyan that M/s TFL had clandestinely removed Sulphuric Acid without payment of duty through their traders including the appellants. In his statement dated 14.10.1997, Shri Neeraj Kumar Tulsiyan stated inter alia as under:

(3.) In respect of the clandestine clearance of Sulphuric Acid, the modus operandi of M/s TFL, as evidenced by the records and the statements, was that, whenever they were to make such clearances through their traders like the appellants, they issued instructions to them not to enter the transaction in their statutory records. The statements given by Shri N.K. Tulsiyan also corroborated this fact and showed that the appellants had abetted the clandestine activity of M/s TFL. It was on this basis that the Department alleged in the show cause notice that the appellants facilitated clandestine removal of goods by M/s TFL and rendered themselves liable for penal action under Rule 209A. It was alleged that the appellants had acquired possession of excisable goods and were concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing such goods, which they knew or had reason to believe, were liable to confiscation under the Central Excise Act, 1944 or the Rules framed thereunder.