Full Judgment
2. The duty has been demanded, and penalty imposed on Shrinath Prints (appellant in appeal E/1443/03) was engaged in the processing of textile fabrics. The duty has been demanded from it and penalty imposed on it and on its partner on the ground that it cleared fabrics without payment of duty and covered to failure to pay duty by issue of invoice differently maintained from those which were issued for payment of duty. Penalty has been imposed on the other applicants on the ground that they received fabrics processed by this firm knowing that appropriate duty had not been paid.
3. The common representative of the assessee and the other applicants contends that the assessee is a victim of a conspiracy by its excise clerk with the labourers and the labourers were on strike. The excise clerk deliberately signed and issued invoices which were different from those issued in the ordinary course. He says that the fact that such invoices were anonymously received by the Chief Commissioner and the Commissioner of Central Excise itself shows this to be the case. He further contends that the excise clerk was not authorised to sign the invoices. He further contends that the excise clerk had animously against the firm because the salary was not paid on time.
4. He contends on behalf of the other applicants that the uniform penalty of each of them of Rs. 20,000/- notwithstanding that they received different quantities of fabrics shows non-application of mind.
5. I find this contention difficult to accept. The representative of the applicant has no evidence in support of his stand that excise clerk deliberately issued invoices. He had no evidence of conspiracy between the clerk and the labourer. He has also not been able to produce invoice issued earlier by the assessee in support of the claim that the excise clerk was not authorised to issue invoices. On the other hand, the departmental representative cites two statements one recorded on 7.6.2001 and second recorded on 20.6.2001 of A.C, Kikla, the partner of the firm in which he accepts the evasion of duty by the firm by issuing different set of invoice from those ordinary issued. The representative of A.C. Kikla accepts that the admissions were made and also that they were not retracted but says that they were extracted under duress. If that were the case, one would have expected some kind of retraction.
There is no such retraction. The nature of the duress is not specified.
Prima facie therefore none of the contention of the applicant on part of the assessee is sustained as any evidence in support. The fact that such invoices were sent to the department officers only shows that the applicant had some enemies. It does not necessarily indicate that the invoices were not issued by the assessee. In the light of the admissions made by A.C. Kikla in the absence of any evidence supporting the assessee's contention, I think it appropriate to ask the assessee to deposit of duty of Rs. 2.5 lakhs and in addition to penalty of Rs, 10,000/-. Applying the ratio of the decision of the Tribunal that penalty cannot be imposed on a firm and its partner, I waive deposit of the penalty imposed on Kikla and stay its recovery.
6. The contention of the departmental representative that each of the persons who are penalised under 209A has accepted that they received fabric processed by the assessee without satisfactory evidence of payment of duty is not rebutted by the representative; of the applicant. Whether penalty is proportionate to the gravity of the offence has to be confirmed by deciding the appeal. At this stage, I ask each of the applicant to deposit Rs. 10,000/-. Deposits to be made within two months from today and compliance to be reported on 11.11.03.