1988 (5) TMI 226 - AT - Central Excise

Summary

Issues Involved:
1. Non-accounting of production in RG-1.
2. Non-accounting of crimped voil.
3. Illicit processing and clearing under duplicate challans.
4. Non-accounting and alleged illicit removal of grey fabrics.
5. Illicit processing and clearance of man-made fabrics.
6. Seizure and confiscation of fabrics from sister concerns.
7. Enhancement of penalty.

Summary:

1. Non-accounting of production in RG-1:
The Additional Collector held that the charge of non-accounting of 145 pieces admeasuring to 11459 L. Mtrs. in RG-1 was established. However, the Tribunal found that the assessee's explanation regarding the timing of the entry in RG-1 was plausible and that the Additional Collector erred in rejecting it without considering the merit of the claim. Therefore, the finding of non-accounting of production was set aside.

2. Non-accounting of crimped voil:
The Additional Collector accepted the assessee's explanation and held that the charge of non-accounting of six pieces of crimped voil admeasuring to 600 L. Mtrs. was not proved. This finding was not challenged by the Board, and hence, the Tribunal did not examine it further.

3. Illicit processing and clearing under duplicate challans:
The adjudicating authority exonerated the assessee of the charge of illicit processing and clearing under nine duplicate challans. The Board did not challenge this finding, so the Tribunal did not address it.

4. Non-accounting and alleged illicit removal of grey fabrics:
The Additional Collector found that the charge of non-accounting of 126 pieces of grey man-made fabrics admeasuring to 12,900.75 L. Mtrs. was proved and presumed illicit removal without payment of duty. The Tribunal, however, noted that there was no positive evidence of illicit processing or clearance and that the finding was based on surmise. The Tribunal set aside the demand of duty for these fabrics.

5. Illicit processing and clearance of man-made fabrics:
The charge of illicit processing and clearance of 38,449.5 L. Mtrs. of man-made fabrics was not established by the Additional Collector. The Board did not challenge this finding, so the Tribunal did not address it.

6. Seizure and confiscation of fabrics from sister concerns:
The Additional Collector ordered confiscation of 2189.75 L. Mtrs. seized from M/s. Gyanesh Silk Mills and 566 L. Mtrs. seized from M/s. Abhishek Silk Mills, allowing redemption on payment of fines. The assessee challenged the duty demand, arguing that it should be levied on the mills from whose premises the fabrics were seized. The Tribunal upheld the Additional Collector's findings, noting the close relationship between the assessee and the sister concerns.

7. Enhancement of penalty:
The Board sought enhancement of the penalty imposed by the Additional Collector. The Tribunal found that the total fine and penalty already exceeded 200% of the duty attempted to be evaded. Given the reduced duty liability and the fines already imposed, the Tribunal saw no justification for enhancing the penalty.

Conclusion:
The appeal filed by the Collector was rejected. The appeal filed by the assessee was allowed in part, setting aside the confiscation and duty demand for 11459 L. Mtrs. and 12,900.75 L. Mtrs. respectively, with refunds ordered if payments had been made. The rest of the Additional Collector's order was confirmed.