RAKESH CHEMICALS (P) LTD. Vs. CCE

JUDGEMENT

(1.) THESE appeals are directed against order -in -appeal dated 7.5.2004 which upheld the order -in -original confirming the demand of duty and imposition of penalty on the company as well as on the Director. Since both the appeals are connected, they are disposed of by a common order.

(2.) THE relevant facts that arise for consideration are that the authorities during the visit of the factory of the appellant resumed records for scrutiny. The authorities referred the invoices issued by the appellants to the Trade Tax Officer on the border of Saharanpur. The report of the Trade tax Officer varied as regard the value on the invoices. On doubting the veracity of invoices, the officers, further, scrutinized and found that the value as shown by the appellant on the invoices which were issued from their record were on very lower side while the invoice value as recorded by Trade Tax Authorities were on a very higher side. On further investigation, the authorities found that the appellants had cleared the goods to one M/s. K.K. Rubber Products on parallel invoices. The appellant on being pointed out these discrepancies deposited the entire amount of duty involved on 29.5.2000 and 23.4.2001. Show cause notice was issued to the appellant for demand of duty and imposition of penalty. The Adjudicating authority confirmed the demand, imposed penalties on the company under Section 11AC and Rule 173Q, and imposed penalty on the Director under Rule 209A of the Central Excise Rule, 1944. On appeal the Order -in -original was upheld. Hence, these appeals.

(3.) LEARNED Advocate appearing for the appellant submits that the record of the Trade Tax authorities as such cannot be an evidence against the appellant for demand and confirmation of duty. It is the submission that in respect of the invoice issued to M/s. K.K. Rubber (P) Ltd. this has been admitted by the appellant and they have discharged the duty liability on this invoice. He submits that the adjudicating authority has not granted them cross examination of Trade Tax authorities in order to bring out the truth in this case. It was his alternative submission that since the amount of duty involved in all the 4 invoices was deposited before the issuance of show cause notice, penalty imposed under Section 11AC, Rule 173Q and Rule 209A is liable to be set aside. He relies upon the decision of the Hon'ble High Court of Judicature at Bombay in the case of CCE v. Gaurav Mercantile Ltd. 2005 (70) RLT 699 (Bom.) and CCE, Mangalore v. Shree Krishna Pipe Industries 2004 (61) RLT 17 (Kar.) Learned D.R. on the other hand submits that the issue of Clandestine removal and demand of duty has been proved in this case by the recovery of the invoice to M/s. K.K. Rubber (P) Ltd. which indicated the existence of parallel invoice book. It is his submission that since under valuation and clandestine removal is proved there cannot be any question of setting aside the penalties imposed on the appellants.