N. CHITTARANJAN Vs. CESTAT, CHENNAI

JUDGEMENT

(1.) The appellant is one of the partners of M/s. Shri Jayamuruga Paper Mart, Sivakasi and aggrieved by the impugned order dated 7-10-2011 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, had filed this appeal and it was admitted on the following substantial question of law :

(2.) A perusal of the materials placed before this Court would reveal that based on the intelligence gathered by the Officers of HPU, Madurai, that M/s. Paragon Paper Private Limited, 543/2, Perumal Goundanpatti, B. Ammapatty, Theni District (in short "PPPL") are selling the Duplex Boards to the safety matches manufacturers situated in and around Sivakasi, Sattur and Kovilpatti, through M/s. Shri Jaya Muruga Paper Mart, Sivakasi, (in short "SJPM"), in which, the appellant is one of the partners, at undervalued price, and are receiving amount in excess of invoices raised through SJPM, which are not accounted to evade payment of Central Excise duty, the above said Officers had visited the residence of Sri K. Seenivasan at Sivakasi - husband of one of the partners of SJPM, viz., Smt. Amsa as well as Office premises of SJPM at various places in Sivakasi and Factory premises of PPPL on 22-1-2009 for scrutiny of documents and records and on the basis of investigation carried out, Officers had seized certain incriminating documents and also recorded the statements of Shri K. Seenivasan, husband of Smt. Amsa, one of the partners of SJPM, Accountant of SJPM, appellant and one of the Directors of PPPL as well as the Collection Agent of PPPL and it was found that 80 pages notebooks, which were seized at the residence of Shri K. Seenivasan and at the Office premises of SJPM, contain receipts details written by Shri K. Rajendran of PPPL and the said fact was admitted by the appellant herein, vide his statement dated 6-5-2009 as well as other persons. Total receipts available from the 80 pages notebooks for the period from March, 2005 to December, 2008, work out to Rs. 3,18,96,521/-. Accordingly, a show cause notice was issued on 1-4-2010, calling upon the PPPL to show cause as to why an amount of Rs. 3,76,086/- (Rupees Three Lakhs and Seventy Six Thousand and Eighty Six only), being the Central Excise duties payable on differential value of excisable goods not properly accounted, should not be demanded under proviso to Section 11A(1) of the Central Excise Act, 1944, an amount of Rs. 3,74,372/- already paid by them should not be appropriated towards the proposed demand, charging of interest under Section 11AB of the Act and penalty under Section 11AC of the Central Excise Act, 1944 and Rule 25 of the Central Excise Rules, 2002. Show cause notice was also issued to Thiru. R. Rajkumar, Director of PPPL, SJPM, the appellant herein, as well as K. Seenivasan, husband of one of the partners and after elucidating their response and giving opportunity of personal hearing, the Assistant Commissioner of Central Excise, Dindigul II Division, Dindigul, had passed the order-in-original dated 22-11-2010, giving a finding that M/s. PPPL had shown lesser price in the invoices issued to the customers while supplying goods and collected amount over and above the invoice prices to evade payment of Central Excise duty and in so far as imposition of penalty on SJPM, Trader of PPPL, and also against the partners of SJPM, viz., the appellant as well as the husband of one of the partners, the said authority had taken into consideration the statement given that they have paid excess amount to PPPL than what was covered by the bill and they had knowledge that PPPL have suppressed the value of paper. Hence, there are evidences to show that SJPM and the individuals had the knowledge about the evasion of duty of PPPL. Therefore, the said authority has passed the following order :

(3.) SJPM, the appellant herein, K. Seenivasan, husband of one of the partners as well as Shri R. Rajkumar, Director of PPPL, aggrieved by the order-in-original passed by the said authority, filed Appeal Nos. 12 to 15 of 2011 before the Commissioner of Central Excise (Appeals), Madurai-2 and vide order dated 25-5-2011, the Appellate authority has reduced the penalty from Rs. 1,00,000/- to Rs. 50,000/- and modified the impugned order as stated below :