M/S. Shri V.K. Gupta vs C.C.E. Noida

[Arising out of Order-In-Original No. 36/Commissioner/NOIDA/2005 dated: 21.11.2004 passed by Commissioner of Customs and Central Excise Noida]

For approval and signature:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Shri V.K. Gupta ...Appellants

(Ex. Employee Margra Ind. Ltd.)

Shri Pramod Nigam

Shri Manoj Gupta

Shri Abbas Ali

Vs.

C.C.E. Noida Respondent

Appearance:

Mr. SD Gaur, Consultant for the Appellant and none appeared for other employees.

Mr. Yashpal Sharma, DR for the Respondent

CORAM:

Hon'ble Mr. Rakesh Kumar, Member (Technical)

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing/decision.12.02.2015

FINAL ORDER NO. 50417-50420 /2015-Ex(Br)

Per Rakesh Kumar (for the Bench):

The facts leading to filing of these appeals are in brief as under:

1.1 M/s Margra Industries Ltd. are engaged in manufacture of Marble Slabs, Tiles etc., chargeable to central excise duty. M/s Marble Art, Sector 11, Noida, is a Group Company which is a 100% EOU engaged in manufacture of same items. While Shri VK Gupta is Manager (Finance) of M/s Margra Industries Ltd, Mr. Pramod Nigam, Mr. Manoj Gupta & Abbas Ali are other employees of M/s Margra Industries Ltd. The allegation against M/s Margra Industries Ltd. is that they had cleared certain quantity of polished marble slabs without payment of duty and on this ground the Commissioner vide order in original dated 21.11.2005 had confirmed duty demand of Rs. 92,09,991/- against M/s Margra Industries Ltd. along with interest on it under section 11AB and had imposed penalty of equal amount on them under section 11AC, and another penalty of Rs 1 crore under Rule 114A of Customs Act 1962. Beside this, the Commissioner also imposed penalty of Rs. 10,000 each of Sh. VK Gupta, Sh. Pramod Nigam, ShriManoj Gupta and Shri Abbas Ali under Rule 209A of erstwhile Central Excise Rule 1944/ Rule 26 of the Central Excise Rule 2001/02 and another penalty of Rs. 5000 each under section 112 of Customs Act 1962. Against this order of the Commissioner, these appeals have been filed.

2. Heard both the sides.

3. While Shri SD Gaur, consultant, appeared, for Shri V. K. Gupta in respect of Shri Pramod Nigam, there is a letter dated 09.11.2014 requesting for decision of his appeal on merits, as he is not in a position to attend the hearing and is also not in a position to appoint any authorized representative. None appeared for the other appellants, Shri Manoj Gupta and Shri Abbas Ali.

4. Shri S D Gaur, Consultant, appearing for Shri VK Gupta, pleaded that the appellant was only an employee - Manager (finance) of M/s Margra Industries Ltd., that he is not involved in any of the activities specified in Rule 209A of Central Excise Rule 1944/ Rule 26 Cental Excise Rule 2001/2002 and also is not involved in any of the activities specified in section 112(b) of Customs Act 1962, as he has neither acquired possession of nor has dealt with any goods produced by M/s Margra Industries Ltd., nor he has dealt with any imported goods, in respect of which he knew or had reason to believe that the same are liable for confiscation, that findings of the Commissioner against Shri V K Gupta are in para 4.301 and 4.302 of the impugned order, that from the role of Shri V K Gupta, as discussed in these paras of the impugned order, it is clear that he was not involved in any of the activity enumerated in Rule 209A of Central Excise Rule 1944/ Rule 26 of the Central Excise 201/2002 or in section 112(b) of Customs Act 1962 and hence, penalty imposed on him is not sustainable.

5. Shri Yashpal Sharma, the Ld. DR defended the impugned order imposing penalty on these appellants, by reiterating the findings of the Commissioner.

6. We have considered the submissions from both the sides and perused the records. The appellants are employees of M/s Margra Industries Ltd. against whom there is allegation of evasion of duty by clandestine removal.

7. The Role of Shri VK Gupta, the Manager Finance of M/s Margra Industries Ltd. is discussed in para 4.301 and 4.302 of the impugned order and the allegation against him is that he was acting as the, go between, between the directors/ partners of M/s Margra Industries Ltd. and M/s Marble Arts, that he was aware of the illegal activities that were going on within M/s Margra Industries Ltd. and M/s Marble Art Ltd., and that he knew very well that the instructions regarding adjustments of cash were not within the ambit of law, but he still acted as a via media for passing on of these instructions, which he knew were wrong, to the subordinate staff. In our view, the role of Shri V K Gupta as described in para 4.301 and 4.302 of the impugned order, is not covered by the activities enumerated in rule 209A of Central Excise Rule 1944/ Rule 26 of the Central Excise Rule 2001/02 for which penalty is attracted and similarly the Role of Shri VK Gupta is also not covered by the activities enumerated in section 112(b) of the Customs Act 1962 which would attract penalty. Shri VK Gupta has not acquired possession of or has not dealt with any excisable goods which he knew or had reason to belief were liable for confiscation and similarly he has not acquired possession of or has sold or was involved in dealing with any imported goods which he knew or had reason to belief were liable for confiscation. In view of this, we hold that the provisions of Rule 209A of Central Excise Rules 1944/ Rule 26 of the Central Excise Rule 2001/2002 are not attracted, and hence, penalty imposed on him is not sustainable. For the same reason, penalty imposed on him under section 112(b) of the Customs Act, 1962 is also not sustainable.

8. As regards, the other employees, Shri Pramod Nigam, Shri Manoj Gupta, Shri Abbas Ali, Shri Pramod Nigam was authorized signatory of M/s Margra Industries Ltd. and the allegation against him is that while as authorized signatory, it was his prime responsibility to ensure that the rules and regulations are scrupulously followed in the unit, but he failed to discharged his responsibility as authorized signatory in this regard. The allegation against Shri Manoj Gupta is that he entered the figures for the period from 23.12.1999 to 23.12.2002 in the register without corroborating record on the basis of the figures supplied by one Shri A. K. Banerjee and thus he has tried to fabricate the records, which he knew were manifestly wrong. The allegation against Shri Abbas Ali is that he prepared invoices for the excisable goods which were removed without payment of duty. In our view for the above activities, as discussed above, neither the provisions of section 112(b) of Customs Act 1962 would be attracted nor the provisions of Rule 209A of Central Excise Rule 1944/ Rule 26 of the Central Excise 2001/2002 would be attracted, and hence, penalty imposed on these employees under Rule 209A of Central Excise Rule 1944/ Rule 26 of the Central Excise Rule 201/2002 and under section 112(b) of Customs Act 1962 are not sustainable.

9. Moreover, the appellants in these appeals are employees of M/s Margra Industries Ltd. who were acting on the instructions of the management and for this reason also, in our view, the penalty under section 112(b) of Customs Act 1962 and Rule 209A of Central Excise Rule 1944 would not be attracted and in this regard we are supported by the Tribunals Judgment in the case of ZU Alvi vs CCE, reported in 2000 (36) RLT- 221 = 2000 (117) ELT  69. The impugned order with regard to imposition of penalty on the appellants is, therefore, set aside. The appeals are allowed.

(Dictated and pronounced in open court)

(S.K. Mohanty) (Rakesh Kumar)

Member (Judicial) Member (Technical)

Neha

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