1988 (11) TMI 223 - AT - Central Excise

Issues Involved:
1. Clandestine Removal Without Payment of Duty
2. Duty Payment and Defective Goods
3. Evidence Misappreciation and Ignored Evidence
4. Valuation of Seized Goods
5. Procedural Compliance under Central Excise Rules

Detailed Analysis:

1. Clandestine Removal Without Payment of Duty
The appellant, M/s. Indian Aluminium Cables Ltd., was accused of clandestinely removing ACSR conductors without paying central excise duty. The central excise officers intercepted a truck loaded with ACSR conductors without any central excise documents. The appellant failed to produce records showing clearances and payment of duty. The goods were seized under Section 110 of the Customs Act, 1962, as applied to central excise matters. The seized goods were found to be sold in the market as good conductors at prices significantly lower than the wholesale price, indicating evasion of duty.

2. Duty Payment and Defective Goods
The appellant contended that the seized goods were defective and rejected by various State Electricity Boards, and thus, no duty was payable. However, the adjudicating authority found that the goods seized were in running lengths and not short lengths as claimed. The goods were found to be in good condition and not scrap, contradicting the appellant's claims. The appellant's plea that the goods were received back from their sister concern and stored in their godown was not supported by any D-3 intimation or statutory records.

3. Evidence Misappreciation and Ignored Evidence
The appellant argued that the evidence was misappreciated and important evidence was ignored. They referred to correspondence with State Electricity Boards and stock statements certified by auditors. However, the adjudicating authority found that the goods seized did not match the goods mentioned in the correspondence. The appellant's claim that the goods were deteriorated and sold as scrap was not supported by any conclusive evidence. The markings on the drums were found to be of new origin, and the serial numbers and weights did not tally with the original gate passes.

4. Valuation of Seized Goods
The valuation of the seized goods was contested by the appellant. The adjudicating authority adopted a valuation of Rs. 17,000 per metric tonne based on a single sale instance. The appellant argued that this valuation was excessive and not justified. However, the tribunal confirmed the valuation, citing the Hon'ble Supreme Court's judgment in the case of A.K. Roy and Another v. Voltas Ltd., which held that the determination of the wholesale cash price does not depend on the number of wholesale dealings.

5. Procedural Compliance under Central Excise Rules
The appellant failed to comply with several procedural requirements under the Central Excise Rules, including:
- No permission under Rule 51-A for bringing duty-paid goods.
- No account under Form V as required under Rule 173-H and 173-L.
- No D-3 intimation for the receipt of goods.
- The markings on the drums did not tally with the original gate passes.
- The goods were not shown in the annual stock-taking report or balance sheets.

The tribunal confirmed the adjudicating authority's findings that the appellant had deliberately cleared ACSR conductors without payment of duty in the guise of scrap. The goods seized were confiscated, but the appellant was given an option to redeem the same on payment of a reduced redemption fine. The duty demand and valuation were confirmed, and the personal penalty was reduced to Rs. 2,00,000.

Conclusion
The tribunal upheld the adjudicating authority's findings on clandestine removal, duty evasion, and procedural non-compliance. The valuation of the seized goods was confirmed, and the redemption fine and personal penalty were reduced to meet the ends of justice. The appeals were otherwise rejected.

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