SUBHASH GUPTA Vs. COMMISSIONER OF C. EX., HYDERABAD

JUDGEMENT

(1.) BOTH appellants have challenged the imposition of penalty of Rs. 20 lakhs and 2 lakhs under Rule 209A of CE Rules 1944. Duty amount of Rs. 39,58,160/ - was confirmed on M/s. Asian Wire Ropes Ltd in the previous OIO No. 61/96, dated 28 -10 -1996. Confirmation of duty was not challenged by M/s. Asian Wire Ropes Ltd., Both these appellants have challenged the imposition of penalty before the CEGAT Chennai Bench. The Chennai Bench by Final Order Nos. 335 and 336, dated 7 -3 -2000 observed that the Commissioner had not discussed the role of both the appellants in evasion of duty and the order imposing penalty was not a speaking order and for that reason, the matter was remanded to the Commissioner to discuss the evidence on record and appropriately fix the penalties. The Commissioner has discussed the evidence against both the persons and has held that they were liable for penalty in terms of Rule 209A of the CE Rules. The findings recorded in paras 9 to 15 are reproduced herein below.

(2.) LEARNED Chartered Accountant and Counsel argued for the appellants. Learned Commissioner (Appeals) submitted that appellant was only a namesake Director. He was not given permission to operate the accounts. He was not directly involved in the administration of the factory. He was only to get 20% of the share holding and remaining 80% was held by Shri M. Janaki Ram and his associates. He did not play any role in day to day affairs of the business, finance management and excise matters. All the activities were looked after by employees Mr. Sathyanarayan and Mr. Prahlad who were under direct control of Mr. Janaki Ram and Mr. Subramanyam, Director. It is his submission that all the transactions have taken place after his resignation from the Company as a Managing Director and he has no personal knowledge of the transaction. Therefore penalty is not leviable. He relied on the rulings rendered in the cases wherein the clandestine removal was not confirmed as in the case of Ramesh Haridas Ashar v. CCE, 2006 (195) E.L.T. 75 (Mum) and Cipta Coated Steels v. CCE, 1999 (113) E.L.T. 490(Tri.).

(3.) LEARNED advocate Ms Padmini arguing for Shri M. Janaki Ram pointed out to the finding recorded in para 30 extracted supra and submitted that Commissioner himself has held that Shri M. Janaki Ram was not concerned with the day to day running of the business and that he was only an MD for name sake. Having held so he ought to have been exonerated. The finding recorded is contradictory in nature and therefore on the basis of the presumptions, penalty can not be imposed under Rule 209 -A of CE Rules, unless the department proves his involvement in evasion of duty.