1993 (6) TMI 145 - AT - Central Excise

Issues Involved:
1. Alleged contravention of Central Excise Rules by the appellants.
2. Clandestine removal of goods without payment of duty.
3. Improper maintenance of statutory records.
4. Adequacy of the adjudication process and principles of natural justice.

Issue-wise Detailed Analysis:

1. Alleged Contravention of Central Excise Rules by the Appellants:
The appellants were charged with contravening several provisions of the Central Excise Rules, including Rule 9(1), 52A, 173B/173C, 173F, 55, and 173G. Specific allegations included the manufacture and clearance of 40 tape recorders without payment of duty and proper documentation, failure to account for six small TV sets, and the use of a second set of invoices to evade duty on goods valued at Rs. 8,34,841.00. The appellants were also accused of not maintaining proper raw material and finished stock registers and failing to file the necessary classification and price lists with the Central Excise authority.

2. Clandestine Removal of Goods Without Payment of Duty:
The Additional Collector concluded that the appellants had cleared TVs, tape recorders, and radio cassette recorders without payment of duty and without proper accountal in their statutory records for the years 1984-85 and 1985-86. This led to a demand for duty of Rs. 85,949/- and the imposition of a redemption fine of Rs. 15,500/- on seized goods, including a car. Additionally, a personal penalty of Rs. 1,00,000/- was imposed under Rule 173Q of the Central Excise Rules.

3. Improper Maintenance of Statutory Records:
The appellants argued that they were both manufacturers and dealers, and their trading activities were duly reflected in their balance sheets. They provided detailed explanations and supported documents to show that the goods were either purchased with valid invoices or manufactured and cleared with gate passes. However, the Additional Collector noted discrepancies, including the failure to maintain up-to-date RG1 registers and the presence of excess stock not accounted for in the records. The appellants' explanation that their accountant was unavailable was deemed unsatisfactory.

4. Adequacy of the Adjudication Process and Principles of Natural Justice:
The appellants contended that the adjudication process was flawed as the order was passed two years after the hearing, without giving them an additional opportunity to present their case. The tribunal noted that the matter was transferred between authorities, and given the voluminous evidence, it was appropriate to remand the case for de novo adjudication. The tribunal emphasized the need for the adjudicating authority to re-examine the issues with reference to the detailed chart provided by the appellants and to pass an appropriate order after giving them an opportunity to be heard.

Separate Judgment:
One judge observed that the appellants were not maintaining proper and up-to-date accounts, as evidenced by their own admissions and discrepancies found during physical verification. The judge noted that the appellants failed to provide satisfactory explanations for the discrepancies and did not maintain separate accounts for their manufacturing and trading activities. The judge agreed with the Additional Collector's findings that the appellants had not complied with the required excise formalities and were liable to a penalty. However, the exact quantum of duty and penalty required re-examination at the original level, and the matter was remanded for further adjudication.

Conclusion:
The appeal was allowed by remand, directing the adjudicating authority to re-examine the issues and pass an appropriate order after giving the appellants an opportunity to be heard. The tribunal emphasized the need for thorough re-examination of the evidence and proper maintenance of statutory records to comply with Central Excise Rules.

← Previous Next →