Judgment:
1. Ms. Reena Khair, learned Advocate submitted that in view of the availability of the Modvat credit of the duty paid on inputs, the demand confirmed against M/s. Mahabir Prasad and Sons is not being contested; that in the present two appeals only the penalty imposed on both the Appellants are being challenged. The learned Advocate submitted that the Appellants manufactured tin containers on which duty was demanded and penalties were imposed on the ground that the Appellants were using power in the manufacture of tin containers and also by clubbing the clearances of another unit with the clearances effected by the Appellants; that as the Modvat credit available to them is more than the duty confirmed against them, there could be no intention to evade the payment of Central Excise duty; that proviso to Section 11A of the Central Excise Act will have no application in such circumstances. She relied upon the decision in the case of Industrial Electronic and Allied Products v. CCE, Pune, 2001 (138) E.L.T. 1421 wherein it was held that there could be no intention to evade payment of duty when the assessee is eligible to claim Modvat credit, which is more than duty liability. Reliance was also placed on decision in the case of D.K. Ariwalla v. CCE (Adjudication) 2001 (138) E.L.T. 684 wherein it was held that if the demand invoking the extended period is not upheld, penalty under Section 11AC would not sustain. She further submitted that as far as penalty imposed on Shri Prem Gupta, Managing Director is concerned, there, is no finding as regards the basis for imposition of penalty on him; that in Order to invoke the provisions of Rule 209A of the Central Excise Rules specific findings is required to be given as regards the manner in which the Appellants had dealt with the goods liable for confiscation. Finally she submitted that the Adjudicating Authority has also ordered confiscation of tin containers with option to redeem the same on payment of fine of Rs. One lakh, which is very excessive.
2. On the other hand, Shri M.P. Singh, learned DR, submitted that the Appellants had returned their Central Excise Registration in March, 1997 and cleared excisable goods valued at Rs. 80 lakhs without payment of duty which clearly shows their intention to evade payment of duty; that accordingly the provisions of Section 11AC of the Central Excise Act are invokable.
3. We have considered the submissions of both the sides. As the Appellants have not challenged the demand of Central Excise duty, we uphold the demand amount of Rs. 9,10,709/- as demanded by the Adjudicating Authority and confirmed by the Commissioner (Appeals) in the impugned Order. We observe that the Commissioner (Appeals) had given his finding as under in the impugned Order : - "The Adjudicating authority has given his findings on the basis of admission made by Shri Prem Prakash Gupta, the Director and Shri Jawahar Lal, Supervisor, about the clandestine manufacture and clearance. The statements given by them were voluntary and those were never retracted. I find that these statements are admissible as relevant under Section 9D of the Central Excise Act, 1944. I find that the Adjudicating Authority has held that the tin-containers which were shown as manufactured and sold by M/s. Kuber Enterprises and the bills/challans of which were recovered from the factory premises of Appellant have also been included in the value of clearances against the Appellant for the entire period. I find that this is also based on the statement made by Shri Jawahar Lal, Supervisor-cum-Clerk, recorded on 12-5-98 and on the admission of Director, Shri Prem Prakash Gupta on 1-7-97. In the course of Adjudicating proceedings however this has been denied. I find on behalf of Shri Gupta, Managing Director, it has been submitted that he was not concerned with the day-to-day working of the unit, yet he has made an inculpatory statement that the goods having been shown as cleared without payment of duty on invoices of M/s. Kuber Enterprises were manufactured by the Appellant unit so is the statement of Shri Jawahar Lal, Supervi-sorcum-Clerk." 4. In view of these specific findings and the fact that the confirmation of demand of duty has not been challenged, the penalty is imposable on the Appellant firm under Section 11AC of the Central Excise Act. However, taking into consideration the circumstances of the matter, we are of the view that the interest of justice will be met if the Appellant firm is directed to pay a penalty of Rs. 50,000/- only.
We order accordingly. We also reduce the redemption fine of Rs. One lakh to Rupees Twenty-five thousand only. The personal penalty imposed on Shri Prem Gupta is set aside as no finding has been mentioned in the impugned order for imposing the penalty on him. Both the appeals are disposed of in these terms.