CENTURY PLYBOARDS (INDIA) LTD. Vs. CCE

JUDGEMENT

(1.) THE appellants are engaged in the manufacture of Plywood classifiable under Chapter 44 of the Central Excise Tariff Act, 1985. The present appeal is against the impugned Order passed by the Commissioner of Central Excise, Calcutta confirming demand of duty of Rs. 34,32,450.00 (Rupees thirty -four lakh thirty -two thousand four hundred fifty) and an equivalent amount of personal penalty under Section 11AC of the Central Excise Act, 1944.

(2.) ELABORATING on the facts of the case, Dr. Chakraborty, learned Advocate submits that on 29.12.1998, the Officers of D.G.A.E.(CE), Calcutta conducted simultaneous searches in the factory premises of the appellant company as also in the various depots located all over India. No discrepancy whatsoever was found either in the factory or at the depots except the Chennai and Bangalore depots. He submits that the verifications conducted by the Officers reveal that the Plywood was being sold at higher value than what was being reflected in the invoices/bills and other records. The statements of various persons from whose possession, the private records/documents were recovered, were recorded by the Officers. During the investigation period, statement of the Managing Director of the appellant company was also recorded. In the said statement, the Managing Director deposed that he had come to know for the first time about the extra realisation by its staff at Chennai and Bangalore depots; that he was not aware of such a practice being undertaken by their staff at the said depots; that probably, it was the Branch/Depot Officials who were doing this on their own and without the knowledge of the management; that this had reflected the malpractice at the said depots. Dr. Chakraborty also submits that the searches conducted at the factory as also at other depots, have not revealed any such extra realisation showing thereby that it was not being done at the Company's behest, but was being done individually by their staff at Chennai and Bangalore depots. However, the Managing Director, accepting his vicarious liability, offered to pay the excise duty in respect of such sales at the higher price. Accordingly, an amount of Rs. 15.00 lakh was deposited by the appellants on 26.2.1999 apart from an amount of about Rs. 10.00 lakh which was recovered in cash from the depots.

(3.) BASED upon the above facts, the appellants were issued a show cause notice on 10.11.1999 proposing to confirm the differential duty allegedly evaded by the appellants during the period from 1.3.1997 to 3.12.1998 by way of under -valuation of Plywood as also from Chennai and Bangalore depots. The notice also proposed imposition of penalty under the provisions of Section 11AC of the Act read with Rule 173Q. The said notice resulted in passing of the impugned Order by the Commissioner.