RAMESH HARIDAS ASHAR Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ALL the three appeals, challenging imposition of personal penalties of Rs. 35 lakhs, Rs. 20 lakhs and Rs. 5 lakhs on Shri Ramesh Ashar, Shri Arun Ashar and Shri R.S. Jajoo, respectively, imposed by the Commissioner under the provisions of Rule 209A of Central Excise Rules, are being disposed off by a common order. We have heard the Id. Counsels appearing for the appellant and Id. SDR for the Revenue and have gone through the impugned order. It may be mentioned here that vide the impugned order, Commissioner has confirmed duty of Rs. 1.25 crores (approximate) against one M/s. Neha synthetics (Proprietary firm with Shri Prem Ganesh Salihar as its Proprietor) along with imposition of personal penalty of identical amount on the said concern on the findings of clandestine processing and removal of processed fabrics. Penalties have also been imposed upon some other noticees. It may be clarified that the appeals of either M/s. Neha Synthetics or any other person except the present three appellants is not before us and no orders, in respect thereof are being passed by us.

(2.) AS per facts on record, the factory premises of one Neha Synthetics, Udgaon, a firm engaged in the processing of fabrics was put to search on 6/7 -7 -94. The appellants herein Shri Ramesh and Arun Ashar are partners in M/s. Metro Furnishing, which is engaged in dealing in grey cotton/man -made fabrics. Metro furnishing used to send grey fabrics to M/s. Neha Synthetics as also to other units for processing of fabrics. They were also acting as a broker of fabrics. They were also acting as a broker in grey fabrics for number of parties. Their office premises were also put to search along with other unit's office premises on the said dates 6/7 -7 -94. During the course of search, processed fabrics believed to have been removed clandestinely by M/s. Neha Synthetics along with incriminating documents were recovered and seized from various places. As a post seizure investigations, statements of various persons were recorded. As we are not dealing with the appeal of main appellant, we do not propose to deal with all the statements and would be dealing with the evidence relied upon by the adjudicating authority for imposing penalty upon the present appellant's under the provisions of Rule 209A.

(3.) IT is seen that the penalties have been imposed upon all the appellants under the provisions of 209A of Central Excise Rules for evasion of Additional Duty of Central Excise by M/s. Neha Synthetics under the provisions of Additional Duties of Excise (Goods of Special Importance) Act, 1957. In terms of the Hon'ble Delhi High Court's decision in the case of Pioneer Silk Mills v. UOI as , no penalty was to be imposed under the said Act, for evasion of Additional Duty of Excise, inasmuch as there were no provisions for the same under the said act at the relevant point of time. The said decision of the Hon'ble High Court was cited before the Commissioner, who has refused to follow the same on the ground that the Revenue has not accepted the same and has filed SLP thereagainst before the Hon'ble Supreme Court. It is now seen that the SLP filed by the Revenue stands dismissed by the Hon'ble Supreme Court as reported in 2002 (145) E.L.T. A74. As such, penalty could not be imposed upon the appellants in terms of the above decision for the period prior to 13 -5 -94, when the provisions of Section 3(3) of Additional Duties of Excise (Goods of Special Importance) Act, 1957 were amended with effect from 13 -5 -94, providing imposition of penalties. As such, the appellant's liability to penalty is required to be adjudged only for the period 13 -5 -94 to 6 -7 -94.