JUDGMENT
Gowri Shankar, Member (T)
1. In the common order impugned in these three appeals, the Commissioner has confirmed the liability to duty on woven sacks of polyethylene manufactured and cleared without payment of duty due thereupon by Jhaveri Polymers Ltd. and ordering confiscation of its plant and machinery with an option to pay fine of Rs. 10 lakhs, and imposed a penalty on it of Rs. 30 lakhs, and penalties of Rs. 10 lakhs on Amit Jhaveri, its Director and Rs. 1 lakh on Gopinathan, its excise clerk.
2. The counsel for the appellants says that the appeals are confined to the penalties. He says that the duty on the goods in question was paid shortly after the investigation commenced, and does not question such liability to duty. He cites the decisions of the Tribunal holding that no penalties can be imposed in cases where duty had been paid prior to issue of notice. He further contends that the failure to pay duty was a bona fide mistake. He says that there is no material to indicate involvement of Amit Jhaveri, and of Gopinathan. He contends in the alternative that penalties are disproportionate, having regard to the total duty not paid of Rs. 11.22 lakhs.
3. The departmental representative emphasises that the fact that evasion of duty was deliberately done by clearing the goods on invoices other than those which were authorised for this purpose, and that no debit was made for the duty payable on these goods.
4. The Tribunal’s decisions relied upon by the appellant are based on the facts and circumstances of each case, among which one may be duty was paid prior to show cause notice. We agree that it will be appropriate to consider a request for leniency which may in deserving cases extend to doing away with penalty altogether in cases in which the assessee on his own accord and before the detection of the case by the department comes forward, admits his having not paid the duty and does it. We however do not find it possible to say that where the assessee pays duty after the department is aware of the fact that he has not done so, any leniency on this ground is not called for. The fact that the assessee does not dispute the liability to duty in such a case does not lead to any specific conclusion of any kind. The assessee may do so because he has realised, that it will be futile to do so, in the light of overwhelming evidence, against him. To extend this principle generally would mean that no person would suffer any punishment for any crime that he commits so long as he admits his guilt to the authorities of his involvement in the crime. The consequences of the universal applicability of such a view are beyond contemplation. While we totally reject this contention, we have in determining the fine and penalties payable by the appellant and the fine payable by the assessee taken into account the total quantum of duty that was evaded, although the rules provide for payment of penalty three times the value of goods.
5. We do not find it possible to accept that Amit Jhaveri has been wrongly implicated. Jhaveri in his statement says that he agree with what Gopinathan said in his statement. In one of the statements recorded on 6.5.1996, Gopinathan says inter alia as follows:
“On being further asked about the other invoices i.e. Sr. Nos. from 1 to 122 and 1 to 270 I have to clarify that as per the direction of Shri Amit P. Zaveri, Director of M/s. Zaveri Polymers Ltd., I was issuing invoices from unprinted loose book for trading of HDPE/PP bags and other garments fabrics for job work.”
6. The fact of Amit Jhaveri being, the Director of the company also being shareholder of the firm cannot be disregarded.
7. It is contended on behalf of Gopinatnan that there is no material to show his conscious and direct knowledge of evasion of duty. He was only, as an employee, following orders that were given to him by Zaveri, the Director. He is also not shown to have received any benefit by the fact of issue by the act which resulted in evasion of duty by the assessee. In his statement about the sales invoice of some garments made by Dinu Industries, Gopinathan said that he did not know about this and that it was Zaveri who can clarify this matter. We do not find any admission by Gopinathan that he was aware of evasion of any duty and do not find it possible to infer, from his statement, that this was the case. He appears to have made duped by Zaveri. We therefore allow his appeal and set aside the penalty imposed on him.
8. We are therefore satisfied that there was a case for imposition of penalty on Amit Jhaveri.
9. Taking into account the amount of duty involved and other circumstances pleaded the penalty imposed on Amit Jhaveri is reduced from Rs. 10 lakhs to Rs. 3 lakhs, on the assessee from Rs. 20 lakhs to Rs. 10 lakhs and fine for redemption of plant and machinery of Rs. 10 lakhs to Rs. 2 lakhs.