PERSONNA COSMETICS AND ORS. Vs. COMMISSIONER OF CENTRAL EXCISE & S.T.
LAWS(CE)-2015-3-11
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 20,2015

Appellant
VERSUS
Respondents

JUDGEMENT

P.K. Das, J. - (1.)THESE appeals are arising out of a common order and therefore, both are taken up together for disposal.
(2.)THE relevant facts of the case, in brief, are that the Appellant No. 1 (M/s. Pesonna Cosmetics), a partnership firm, engaged in the manufacture of Toothpaste, Shampoo and Shaving Cream etc., classifiable under Chapter 33 of the schedule to the Central Excise Tariff Act, 1985. On 6th/ 7th March 2007, the Central Excise officer of HQrs (Preventive) visited the factory premises of the Appellant No. 1 and prepared a stock verification report in the presence of two independent panchas and Appellant No. 2, claimed as Director of Appellant No. 1. It was recorded shortage of finished goods involving Central Excise duty of Rs. 7,63,190/ -. The said Central Excise officers also recorded the statement of Appellant No. 2 on 07.3.2007.
A show cause notice dated 02.6.2009 was issued proposing demand of duty alongwith interest and imposition of penalty on the Appellant No. 1 and to impose penalty on the Appellant No. 2. The adjudicating authority confirmed the demand of duty of Rs. 7,63,190/ - alongwith interest and also imposed penalty of equal amount of duty on the Appellant No. 1. It has also imposed penalty of Rs. 2,50,000/ - on the Appellant No. 2, as Director of the Appellant No. 1, under Rule 26 of the Central Excise Rules, 2002. It has also confiscated the goods removed clandestinely and imposed Redemption Fine of Rs. 50,000/ - on the Appellant No. 1. The Commissioner (Appeals) modified the adjudication order to the extent the redemption fine was set -aside.

(3.)LEARNED Advocate for the appellants submits that there was no shortage of finished goods and no stock verification was conducted. He submits that the entire proceeding was initiated on the basis of statement of Appellant No. 2, who claimed to be a Director of the appellant firm. It is submitted that Appellant No. 1 is a partnership firm and registered with the Central Excise authorities. There cannot be Director in a partnership firm. Appellant No. 2 claimed as Director of the appellant firm, who has no relation with Appellant No. 1 and therefore statement of Appellant No. 2 cannot be the basis for the demand of duty. He submits that no statement was recorded of the partner and the employees of the appellant firm. He drew attention to the relevant portion of the Panchnama, partnership deed and reply to the show cause notice.
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