ORDER
S.S. Kang, Vice-President
1. Heard both sides.
2. The appellant filed this appeal against the order-in-appeal passed by the Commissioner (Appeals).
3. The brief facts of the case are that the appellants are engaged in the manufacture of DG sets. The business as well as residence premises of the appellants were searched by the Revenue officers and during investigation it was found that the appellants were clearing the excisable goods without payment of duty by maintaining parallel set of invoices. Show-cause notice was issued for demand of duty and imposition of penalty. The adjudicating authority confirmed the demand of Rs. 25,110/-, penalty of Rs. 50,000/- was imposed under Rule 173Q of Central Excise Rules and penalty equal to the duty demand was imposed under Section 11AC of Central Excise Act, penalty of Rs. one lakh was imposed on Shri Mohan Singh, Director under Rule 209A of Central Excise Rules.
4. The contention of the appellant is that there is no evidence on record to show that the goods were cleared without payment of duty. The photocopies of invoices, which are made basis for the demand, were not recovered by the Revenue from the business premises and residence premises of the appellant. The source of procurement of invoices has not been disclosed and the signature on the invoices are denied by the appellant. In these circumstances, the demand is not sustainable.
5. In respect of the penalties, the contention is that the provisions of Rule 173Q were invoked without specifying the particular clause of Rule 173Q had been allegedly contravened the provisions by the assessee. The appellant relied upon the decision of Hon’ble Supreme Court in the case of Amrit Foods v. CCE reported in 2005 (190) E.L.T. 433, therefore, the imposition of penalty under Rule 173Q is not sustainable. In respect of the penalty on the Director, the contention is that there is no finding regarding omission or commission with intent to evade payment of duty on the part of the Director. Therefore, penalty on Director is also not sustainable and provisions of Rule 209A are not applicable.
6. The contention of the Revenue is that in this case the photocopies of invoices which are signed by authorized signatory of the appellant showing clearance of goods on payment of duty which were not reflected in the statutory record clearly shows that the goods were cleared without payment of duty. Investigation was also conducted from the transporter regarding transportation of the goods manufactured by the appellant which clearly shows that the goods manufactured by the appellants were transported under particular GRs and there is no corresponding entry in the statutory record regarding the clearance of goods. In respect of the penalties, the contention is that Shri Mohan Singh was the Director who was dealing the day-to-day affairs, therefore the goods which were removed without payment of duty were without his knowledge.
7. In this case, the demand is confirmed after taking into consideration the photocopies of invoices on which the appellants are only contesting that these are not recovered from their premises. Investigation was also made from the transported company which shows that these goods were transported which were recovered (sic) in the GRs but no corresponding entries made in the statutory record regarding clearance of the goods. In these circumstances, I find no merit in the contention of the appellant. The duty demand is upheld in respect of the penalty under Rule 173Q of Central Excise Rules. I find that in the adjudication order as well as in the Commissioner (Appeals’) order, it is not specified which particular clause or Rule 173Q of Rules have been allegedly contravened by the appellant. On this ground, the Hon’ble Supreme Court in the case of Amrit Foods (supra) set aside the penalty. In view of the above decision of the Hon’ble Supreme Court, the penalty imposed under Rule 173Q is set aside. The appellant cleared the goods without payment of duty, therefore, I find no ground to interfere the amount of penalty imposed under Section 11 AC of Central Excise Act. In respect of the penalty imposed on Shri Mohan Singh, Director, keeping in view the facts and circumstances of the case, the penalty is reduced to Rs. 25,000/-otherwise the impugned order is upheld.
(Dictated and pronounced in open Court on 19-6-2006)