In a recent case, the New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty of confiscation of unaccounted raw material and clandestine of Gutka.
Two trucks with specific registration numbers were carrying non-duty paid gutka, one of the trucks was intercepted by the officers of Central Excise. The officers intercepted the other truck on 02.04.2008, at the Daulatabad Ghat and also identified the godown where the second truck had already off-loaded its cargo.
Further, the officers identified a whole network of transport, storage places and, godowns that were engaged in the manufacture, transportation and sale of gutka clandestinely manufactured by M/s Shree Raj Exports Pvt Ltd., Mata Ka Than, Jodhpur. During investigations, a large number of unaccounted-for raw materials and finished goods were seized and trucks involved in transporting the non-duty paid gutka were also seized along with several documents which were recovered from various premises.
In respect of these seizures, separate show-cause notices were issued. A show cause notice was issued to M/s Shree Raj Exports Pvt Ltd alleging evasion of duty. It was also proposed to impose penalties.
Counsel submitted that despite his clear findings, the Commissioner imposed penalty of Rs. 1 crore upon Sunil Sarogi. Further, in the adjudication order itself the Commissioner sanctioned prosecuting against Sunil Sarogi in sub-para 8 of 52.8.1 of the impugned order.
A two-member bench comprising Justice Dilip Gupta, President and Mr P V Subba Rao, Member ( Technical ) observed that the transporters and trucks drivers may or may not be very well educated. It was also a fact that every truck driver and transporter who transports commercial goods carries with him the Bill to cover the goods which he was transporting.
Further observed that once the goods reach the destination he shows the Bills to the recipient and gets an acknowledgment that the goods in the Bills received. Therefore, no matter how less educated the driver might be, he will certainly know that he has to carry the goods only with the Invoice or Bill. Therefore, the Tribunal found no force in the submissions of the appellant that the penalties imposed on them must be set aside.
The CESTAT dismissed the appeals listed and upheld the penalties imposed under rule 26 on the appellants. Excise Appeal filed by Sunil Sarogi, the appellant was allowed and set aside the impugned order.
Shri A K Prasad appeared for the appellant and Shri Bhagwat Dayal, Authorised Representative appeared for the respondent.
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