COMMISSIONER OF C. EX., AHMEDABAD Vs. GAYATRI DYECHEM

JUDGEMENT

(1.) Offence case was registered against M/s. Gayatri Dyechem and others by the Revenue on the ground that they were engaged in evasion of Central Excise duty by suppressing production and clandestine removals to avail SSI exemption by staying within the limits. It is the case of the Revenue that Gayatri Dyechem was receiving raw materials from their sister concerned M/s. Camex Colour Ltd. and did not account the same in the statutory record. Finished goods manufactured by M/s. Gayatri Dyechem were cleared to the godown of M/s. Camex Colours showing that Camex Colours was a trader but in reality Camex Colours was used to adjust the undeclared of production of Gayatri Dyechem. After investigation, issue of a show cause notice and adjudication process, duty demand of Rs. 61,464/ - with interest was confirmed against M/s. Gayatri Dyechem with equal amount of penalty under Section 11AC of Central Excise Act, 1944. 1,605 Kgs of dyes which was seized or confiscated and allowed to be redemption on payment of fine of Rs. 1 lakh. Further, penalty of Rs. 2 lakh was imposed on Gayatri Dyechem and other concerned persons also. On an appeal filed by the appellants, Commissioner (Appeals) allowed the appeals and set aside the adjudication order confirming the demand for duty imposing redemption fine and imposing penalties on all persons excepted two persons who had not filed appeal. Hence Revenue has filed this appeal.

(2.) LEARNED D.R., on behalf of Revenue submitted that 4,755 Kgs of dyes should have been confiscated since the appellant could not produce excise invoices or any purchase bills. Further, he also contended that setting aside confiscation of 1,605 Kgs of dyes is also not correct ignoring the statement of Shri Jitubhai Shah which had not been retracted. The demand for duty of Rs. 61,464/ - has been set aside on the ground that there is no evidence other than the statement of Shri Jitubhai Shah, Chemist. The demand should have been confirmed in view of the statement by Shri Jitubhai Shah. He also justifies the penalties imposed on others.

(3.) ON the other hand, Shri S.J. Vyas, learned advocate, appearing on behalf of the appellants submits that the order of the Commissioner (Appeals) is legal and proper and does not require any interference.