B.G. PLYWOOD IND. (P) LTD. Vs. CCE

JUDGEMENT

(1.) All these appeals arise from common Order -in -Original passed by Commissioner of Central Excise, Madras vide his Order -in -Original No. 63/95 dated 3.8.1995. By this order, he has confirmed a duty demand of Rs. 52,90,941/ - as detailed in the show cause notice against M/s. B.G. Plywood Industries (P) Ltd. (hereinafter called M/s. BGP) under Rule 9(2) of CE Rules read with proviso to Sub Section 1 of Section 11A of CE Act, 1944 and Section 11A(2) ibid. Further, there is a penalty of Rs. 5,00,000/ - on M/s. BGP under Rule 173Q of CE Rules. There is a penalty of Rs. 5000/ - on M/s. B.G. and Sons (hereinafter referred as BGS) and M/s. Vijay Enterprises (hereinafter known as M/s. VE) under Rule 209A of CE Rules. A penalty of Rs. 10,000/ - has been imposed on Shri Lalchand Agarwal, Director of BGP under Rule 209A of CE Rules 1944. The Commissioner had ordered for confiscation of plant and machinery of M/s. BGP under Rule 173Q of CE Rules. However, he allowed the same to be redeemed on payment of a fine of Rs. 10,000/ - under Section 34 of CE Act 1944.

(2.) The case against M/s. BGP made out by the investigating officers, Hqrs. (Preventive), Madras is that they are manufacturers of veneer and plywood falling under Central Excise Chapter heading 4404 and 4408.90 of CE Act, 1985. A visit to their premises on 25.2.1991 and on recording of statements from persons and from some buyers, it revealed that there were three concerns namely M/s. BGP, M/s. BGS and M/s. VE managed by Lalchand Agarwal and his brothers M/s. Pawan Kumar Agarwal and Uday Kumar Mussadi and Ajay Kumar Mussadi as Directors and partners in the respective concerns. M/s. BG and Sons and M/s. VE were working as trading concerns dealing in timber. Another trading concern was also functioning under the name and style of "Lalchand Vijay Kumar" with Directors of M/s. BGP and Arun Kumar Agarwal as Partners.

(3.) Under letter dated 3.11.1990 and 5.11.1990 M/s. BGS and M/s. VE had sought permission from Assistant Collector for sending logs to M/s. BGP for manufacture of veneers under Rule 57(2) on job work basis. M/s. BGP too on its part filed a declaration/undertaking in respect of that job work. Permission was granted vide Assistant Commissioner's letter C. No. IV/16/4/76/9 -T 2 dated 12.11.1990 and IV/16/470/90 -T2 dated 7.11.1990. However, M/s. BGS and M/s. VE were only trading concerns and had no Central Excise Licences.