2006 (6) TMI 273 - AT - Central Excise

Clandestine removal - reliance placed upon certain loose sheets, which were recovered from the factory premises during the follow up investigation, endorsed in the statements of the Director, Accountant and the Production Supervisor of the company - HELD THAT - There is no denial of the fact that ample evidence exists to show the recovery of loose sheets from the premises of the appellants. Though the show cause notice and the order in original refer to them as loose sheets, we find that by referring to the dates and other details contained in them there is a clear continuity interlinking them in a cogent manner. They could have been detached from a note book or exercise book. The continuity is revealed by the running dates starting from 17-1-2002 and ending upto 18-2-2002. The statements of Director and Accountant and also the Production Supervisor all go to prove that the appellants were engaged in clandestine removal of excisable goods, as detailed in the loose sheets. Having admitted, saying that the details such as purchase of raw material, sale of finished products and payments thereof etc., were not investigated by the department appears to us as an argument for argument s sake. This argument does not make the case weak in any manner because it is settled position in law that the admitted fact need not be proved. Finding no infirmity in the impugned order, we are inclined to go by the reasoning and findings as contained in the impugned order. We, however, on considering the facts and circumstances of the matter find that there is no warrant for interfering with the impugned order in any way as the penalty imposed is commensurate to the nature of offence - Appeal dismissed.

Summary

Issues Involved:
1. Interception of tempo carrying excisable goods without duty payment.
2. Discovery of additional running machines and undisclosed godowns.
3. Recovery of loose sheets indicating clandestine removal of goods.
4. Admission of clandestine removal by company officials.
5. Calculation of duty based on evidence and statements.
6. Imposition of penalties on the company and its director.

Detailed Analysis:

1. Interception of Tempo Carrying Excisable Goods Without Duty Payment:
The case began with the interception of a tempo on 19-2-2002, carrying excisable goods (pan masala/Gutka) without evidence of duty payment. This incident triggered further investigations into the activities of the appellants.

2. Discovery of Additional Running Machines and Undisclosed Godowns:
During the investigation, Central Excise Officers discovered that 26 machines were operational, contrary to the appellants' declaration of only 14 machines. Additionally, two undisclosed godowns were found storing excisable goods without evidence of duty payment.

3. Recovery of Loose Sheets Indicating Clandestine Removal of Goods:
Loose sheets recovered from the factory premises showed date-wise removal of "PANKING" brand gutka between 7-1-2002 and 18-2-2002. These sheets were crucial in establishing the clandestine removal of goods.

4. Admission of Clandestine Removal by Company Officials:
The Commissioner concluded that the appellants were engaged in clandestine clearances based on the interception of the tempo, corroborative statements from the Director, Accountant, and Production Supervisor, and the recovery of loose sheets. The appellants had also paid Rs. 20,00,400/- towards duty during the investigation, which supported the claim of duty evasion.

5. Calculation of Duty Based on Evidence and Statements:
The duty calculations were based on evidence collected, including the loose sheets and statements from company officials. The department calculated the duty not on the declared 14 machines but on the actual operational evidence of 26 machines. The details in the loose slips were admitted by all concerned as clearances without duty payment.

6. Imposition of Penalties on the Company and Its Director:
The Commissioner imposed a penalty of Rs. 30,55,723/- on the company and Rs. 1,00,000/- on the Director, appropriating Rs. 20,00,400/- already deposited by the appellants. The penalties were deemed commensurate with the nature of the offence.

Conclusion:
The Tribunal upheld the Commissioner's order, finding ample evidence of clandestine removal of goods. The loose sheets, corroborative statements, and undisclosed operational machines and godowns substantiated the charges. The appeals were dismissed, and the penalties were upheld as appropriate for the offence.