The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), upheld the penalty under Rule 26 of the Central Excise Rules, 2002 on the proof that sufficient evidences adduced to allege clandestine removal.
Intelligence was received that Appellant (Shri Paresh Tyagi) and his brother Shri Pintu Tyagi (Expired on 17.06.2013) and were engaged in casting/ forging (commonly known as “Dhalai”) of LPG stove valve of brass and bar of brass (Saria). Their turnover was more than Rs 10 Crores but they had neither taken registration nor were paying any central excise duty on the excisable goods manufactured and cleared by them.
Incriminating documents found there from were also resumed and proper panchnama drawn at this premises. Statements of Shri Raju Yadav Accountant of the unit of Shri Pintu Tyagi and Shri Pradeep Tyagi, Shri Ashok Tyagi and Shri Gajendra Tyagi were also recorded on the spot under Section 14 of the Central Excise Act,1944.
The factory has not been given any name nor has been registered with any of the government departments either centre or state. The entire activities undertaken in the factory were done clandestinely and no formal records were maintained about the operation. Then factory was having sufficient machines/ furnaces & equipment to produce 1400-1500 kgs of finished goods i.e. Brass Rods and Brass Forgings for gas stoves in a day. All the receipt of raw material and dispatch of finished goods was done on kachha slips.
A Two Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Technical Member observed that “the appellant has in his statement recorded under section 14 while giving the details of working of the unit have admitted that he was actively involved in the working of the unit the grounds taken in the appeal which are in nature of alibi do not merit any consideration.”
“His active involvement in the clandestine activities is an admitted fact and penalty imposed on him under Rule 26 is total justified” the Bench concluded.
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