1989 (5) TMI 205 - AT - Central Excise

Summary

Issues Involved:
1. Non-maintenance of R.G. 1 register on a daily basis.
2. Non-accountal of processed fabrics, rags, and chindies.
3. Non-maintenance of accounts slab-value-wise.
4. Alleged illicit removal of fabrics without payment of duty.

Summary:

Issue 1: Non-maintenance of R.G. 1 register on a daily basis
The appellants, M/s. Raza Textiles Limited, were accused of not making daily production entries in the R.G. 1 register, instead making them on the third day. The appellants argued that this practice was in accordance with the instructions from the Collector of Central Excise, Allahabad, dating back to 1965. The adjudicating authority dismissed this claim due to lack of original documentation. However, the Tribunal found the rebuttal by the adjudicating authority untenable, noting that the permission references should have been verified. The Tribunal held that the allegation of not maintaining R.G. 1 on a daily basis was not substantiated due to the specific permission given to the appellants.

Issue 2: Non-accountal of processed fabrics, rags, and chindies
The appellants were accused of not accounting for various fabrics in the R.G. 1 register. The appellants contended that their method of accounting, which involved recording fabrics at the off-loom stage and then in the EB-4 register after processing, had been in practice for a long time and was known to the departmental officers. The Tribunal agreed with the appellants, noting that this procedural practice had been in place for a long time without objection from the department. The Tribunal set aside the order of confiscation of fabrics and the associated redemption fine.

Issue 3: Non-maintenance of accounts slab-value-wise
The appellants were accused of not maintaining accounts slab-value-wise as required by Notification 251/82. The appellants argued that maintaining such accounts was impractical due to the large number of fabric sorts and fluctuating prices. The Tribunal appreciated the difficulty and noted that this procedural matter should have been addressed by the concerned authorities immediately. The Tribunal held that it did not call for booking an offence unless the assessee had been properly warned.

Issue 4: Alleged illicit removal of fabrics without payment of duty
The appellants were accused of illicitly removing 28488.13 Sq. Mtrs. of cotton fabrics and 3885.57 Sq. Mtrs. of man-made fabrics without payment of duty, based on a note-book maintained by employees. The appellants argued that the note-book was not an official record and was not reliable. The adjudicating authority found the note-book significant, but the Tribunal observed that the note-book did not indicate removal of goods from the factory. The Tribunal noted that the entries in the note-book were less than those in the R.G. 1 register on some dates, indicating that the production was duly accounted for. The Tribunal found the investigation regarding the note-book lacking and held that the finding of removal of goods without payment of duty was not justified.

Conclusion:
The Tribunal found that none of the allegations against the appellants survived. Consequently, the imposition of penalty on the appellants was also set aside, and the appeal was allowed.