1985 (2) TMI 137 - AT - Central Excise

Summary

Issues Involved:
1. Allegations of non-compliance with Central Excise regulations.
2. Allegations of clandestine removal and non-payment of duty for the years 1978-79, 1979-80, and 1980-81.
3. Allegations of fraudulent practices and fabrication of records.

Summary:

Issue 1: Allegations of Non-Compliance with Central Excise Regulations
- The Central Excise Officers found several discrepancies during their surprise visit on 21-5-1980, including incomplete RG-1 Register and gate-passes, unaccounted hacksaw blades, and shortages in the bonded store-room.
- The appellants failed to produce any registers or documents to account for the manufacture and clearance of these goods.

Issue 2: Allegations of Clandestine Removal and Non-Payment of Duty
- 1978-79: The appellants argued that there was no allegation of clandestine removal and that the demand for duty was barred by limitation. They also claimed that the value of goods cleared was incorrectly computed due to a revised price list.
- The Tribunal held that the demand for duty was not barred by limitation, as the show-cause notice alleged suppression of facts and clandestine removal.
- 1979-80: The appellants contended that the allegations were based on unverified and haphazardly prepared annexures. They also claimed that some goods were non-excisable and that certain entries were fictitious, created by a former employee for malicious purposes.
- The Tribunal found the explanations unconvincing and upheld the demand for duty, except for the alleged supplies to the Director General of Supplies & Disposals, for which there was no evidence of despatch.
- 1980-81: The appellants claimed eligibility for certain exemptions and argued that the irregularities were due to the actions of a former employee.
- The Tribunal found the explanations unsatisfactory and upheld the demand for duty, noting that the appellants had not maintained proper excise records and had resorted to fraudulent practices.

Issue 3: Allegations of Fraudulent Practices and Fabrication of Records
- The appellants admitted to creating fictitious entries and fabricating documents to obtain larger financial assistance from banking institutions.
- The Tribunal found this admission indicative of institutionalized fraudulent practices and rejected the appellants' explanations for the lapses.
- The Tribunal upheld the penalty imposed, considering the scale of forgery and fraudulent practices.

Conclusion:
- The Tribunal provided relief only in respect of the alleged supplies to the Director General of Supplies & Disposals, as it was established that no such supply had been made.
- The order of the Collector was otherwise upheld, and the appeal was disposed of accordingly.