TARA CHAND SHIVAL Vs. CCE

JUDGEMENT

(1.) This appeal is against imposition of personal penalty of Rs. 10 lakhs on the appellant under Rules 198 and 209 A of the erstwhile Central Excise Rules, 1944 and under Sections 112 and 117 of the Customs Act by the Commissioner of Central Excise and Customs, Jaipur. The appellant was the authorized signatory of M/s. Reliable Poly Fib (India) Ltd. (for short, M/s. RPFL) during the period relevant to this case. M/s. RPFL were a 100% Export Oriented Unit (EOU). The appellant's brother Shri Richhpal Sharma was one of the Directors of another company, M/s. Pushpa Silk Mills Pvt. Ltd. (for short M/s. PSML), which was also a 100% EOU. Both the companies were engaged in the manufacture of grey fabrics. For the manufacture of grey fabrics, M/s. PSML used polyester/nylon filament yarn either imported or procured from other 100% EOUs at 'nil' rate of duty. 106.062 MTs of nylon filament yarn so procured were shown to have been sold by them to M/s. RPFL at 'nil' rate of duty against CT -3s. The relevant ledger account maintained by M/s. PSML showed payment for the material as having been received from M/s. RPFL by cheques or in cash. But investigation conducted by Anti -Evasion officers of Central Excise revealed that the above quantity of nylon filament yarn had not actually been despatched to M/s. RPFL by M/s. PSML and that only the papers (invoices, AR -3As etc.) were sent to them. Investigations further disclosed involvement of the appellant in connivance with his brother Richhpal Sharma in the transactions whereby, department found, M/s. PSML had evaded Customs duty on nylon filament yarn by selling the goods clandestinely in the domestic market without payment of duty. Accordingly, show -cause notices were issued to M/s. PSML, Shri Tara Chand Sharma (present appellant) and others. While a demand of duty was raised on M/s. PSML, penalty was proposed to be imposed on the appellant under Rules 198 and 209A and under Section 112. Para (13) of the show -cause notice contained the allegations against the appellant and the same is extracted below: -

(2.) Heard both sides. Ld. Advocate for the appellant submitted that imposition of any penalty under Rule 209A on the appellant was not sustainable as no excisable goods were confiscated from him. The appellant's statements recorded by the departmental officers on 9.3.2000 and 29.3.2000 had been retracted by him by way of an affidavit on 4.4.2000. That affidavit was in Hindi. An English translation, duly notarised, was submitted to the Commissioner on 22.5.2001. None of these documents was considered by the Commissioner, who held that there was no retraction of the confessional statements. The penalty imposed on the appellant was a composite penalty under Rules 198 and 209A as well as Sections 112 and 117. Sections 112 and 117 could not be invoked simultaneously. It was also pointed out by the counsel that the maximum penalty imposable under Rule 198 was only Rs. 1000. The counsel also relied on the following decisions:

(3.) We have carefully examined the records and submissions. The allegations against the appellant in the show -cause notice have been reproduced earlier in this order. We find that, in his statements recorded under Section 14 of the Central Excise Act, the appellant has admitted the alleged facts. Shri Balkishan Jhawar, Director of M/s. RPFL has also confirmed the statements of the appellant who was the authorized signatory of that company. We are not inclined to accept the plea that the statements dated 9.3.2000 and 29.3.2000 were retracted by the appellant before the adjudicating authority. It is claimed that the affidavit was in Hindi and the same was later on translated into English. An English translation of an affidavit dated 4.4.2000 is seen on record. A copy of the appellant's letter dated 20.5.2001 addressed to the Commissioner is also noticed. This appear to be the covering letter for the English translation of the affidavit dated 4.4.2000 and bears the date seal of the Commissioner's office indicating that this letter was received in that office on 22.5.2001, These documents, however, do not show that the original affidavit in Hindi was submitted to tbe Commissioner, nor is there any evidence on record to indicate that any such affidavit in Hindi was received by the Commissioner. We have, therefore, to fall back upon the confessional statements of the appellant. The appellant has clearly admitted his role alleged in the show -cause notice, which was apparently one of abetment of evasion of Customs duty by M/s. PSML without physical clearance of nylon filament yarn by them to M/s. RPFL. The vital documentary transactions were done in a fraudulent manner by the appellant to make it appear that the material had been cleared at 'nil' rate of duty by M/s. PSML to M/s. RPFL. The materials covered by these documents have been held to have been clandestinely diverted by M/s. PSML to the Domestic Tariff Area and the appeals filed against this finding stand rejected. That the appellant forged the signature of the jurisdictional Supdt. of Central Excise has been confirmed by the Supdt. himself. At no stage of the proceedings has the appellant asked for cross -examination of the Supdt., nor has he taken any steps to disprove the department's allegation that the Supdt's signature on the rewarehousing certificates was forged and not genuine. The evidence on record is totally against the appellant. We, therefore, hold that the appellant should suffer penalty.