2005 (9) TMI 153 - AT - Central Excise

Summary

Issues:
- Duty demand based on entries in batch register and loose papers recovered from premises
- Disallowance of Modvat credit on inputs
- Imposition of penalty under Section 11AC of the Central Excise Act
- Responsibility of Factory Manager for clearance of goods without duty payment

Analysis:
The case involved the manufacture of Bulk Drugs (Paracetamol) where duty demand was raised based on entries in the batch register and loose papers recovered from the premises. The officers found discrepancies in the stock verification, with inputs on which credit was taken found short. A show cause notice was issued, demanding duty calculated from the entries in the batch register and private records. The appellant contested the demand, arguing lack of evidence linking the entries to their production and clearance of goods. The Revenue, however, maintained that the entries in the batch register and loose papers reflected production quantities, which were not properly recorded in the statutory RG-1 record. The Tribunal upheld the duty demand, emphasizing the responsibility of the Factory Manager for ensuring appropriate duty payment on goods produced and cleared. The penalty imposed on the Factory Manager was also affirmed.

Regarding the disallowance of Modvat credit on inputs, the Tribunal did not delve into specific details but focused on the broader issue of duty demand based on discrepancies in production records. The appellant's argument challenging the basis of duty calculation from recovered records was not accepted, leading to the dismissal of the appeal. The Tribunal's decision highlighted the importance of maintaining accurate production and clearance records in line with statutory requirements to avoid duty evasion allegations.

In terms of the penalty imposed under Section 11AC of the Central Excise Act, the Tribunal found no grounds for interference in the adjudicating authority's decision. The responsibility of the Factory Manager for ensuring duty payment on goods cleared without payment was reiterated, emphasizing the accountability of key personnel in manufacturing and clearance processes. The Tribunal's dismissal of the appeals underscored the significance of compliance with excise regulations and the consequences of inadequate record-keeping and duty payment practices.