1989 (6) TMI 147 - AT - Central Excise

Summary

Issues Involved:
1. Demand of duty and imposition of penalty.
2. Denial of natural justice and opportunity to cross-examine the accountant.
3. Validity of evidence and findings based on the private note book.

Summary:

1. Demand of Duty and Imposition of Penalty:
The appellants, M/s. Ludhiana Food Products, challenged the order of the Collector of Central Excise, Chandigarh, demanding duty of Rs. 1,00,257/- and imposing a penalty of Rs. 50,000/-. The firm was engaged in manufacturing biscuits and availed small scale exemption u/s Notification No. 80/80-CE dated 19-6-1980. The Central Excise Preventive officers intercepted a vehicle carrying biscuits without genuine bills and seized documents from the factory, including a private note book indicating clandestine sales exceeding the exempted limit, thus evading excise duty.

2. Denial of Natural Justice and Opportunity to Cross-Examine the Accountant:
The appellants argued for a remand to cross-examine the accountant, whose private note book was pivotal to the Collector's findings. They claimed the accountant was eniminical and had planted the note book to trap them. However, the Tribunal found no merit in this argument, noting that the appellants had ample opportunity to defend themselves and failed to establish their case. The Tribunal agreed with the Collector that there was no violation of natural justice.

3. Validity of Evidence and Findings Based on the Private Note Book:
The Tribunal examined the facts and found that the vehicle intercepted was carrying biscuits without proper documentation. The private note book seized from the factory contained entries of sales without payment of excise duty. The appellants' partner had admitted the signatures and entries in the note book, which matched the sales bills. The Tribunal noted that the appellants did not initially claim the note book was manipulated and only raised this defense later, which appeared to be an afterthought. The Tribunal concluded that the note book was genuine and the appellants had failed to disprove the charges.

Conclusion:
The appeal was dismissed, upholding the demand of duty and findings of the Collector. However, the penalty was reduced from Rs. 50,000/- to Rs. 10,000/-.