1993 (8) TMI 193 - AT - Central Excise

Summary

Issues Involved:
1. Jurisdiction of the Central Excise Officers.
2. Reconciliation of records and liability to pay duty.
3. Proof of surreptitious removal of goods.
4. Time-barred demand.
5. Validity of demand and imposition of penalty.

Summary:

Jurisdiction of the Central Excise Officers:
The appellant argued that the Collector of Central Excise, Calcutta-I had no jurisdiction to demand duty on goods manufactured in Maharashtra. The Tribunal held that since the goods were transferred from the appellant's Bombay factories to their Calcutta Works and the appellant maintained accounts and paid duties in Calcutta, the Central Excise Officers of Calcutta had jurisdiction over the non-duty paid goods. The Tribunal referenced the decision in C.C. Industries and Others v. H.N. Ray & Another, 1980 (6) E.L.T. 442 (Bom.), confirming that the jurisdiction lies with the officers where the goods are received and stored.

Reconciliation of Records and Liability to Pay Duty:
The appellant failed to maintain proper and complete records for non-duty paid goods brought from their Bombay factories, violating Notification No. 118/75-C.E., dated 30-4-1975. The Tribunal noted that the appellant did not submit D-3 declarations and failed to account for several items. The Tribunal held that the appellant did not discharge the burden of proving that the non-duty paid goods were used in the manufacture of excisable goods, thus liable to pay duty.

Proof of Surreptitious Removal of Goods:
The Tribunal found that the appellant did not maintain proper records and failed to explain discrepancies in stock verification. The Tribunal referenced the Supreme Court decision in D. Bhoormull, 1983 (13) E.L.T. 1546, stating that the department is not expected to prove its case with mathematical precision. The Tribunal concluded that the appellant's conduct and the circumstances indicated surreptitious removal of goods.

Time-Barred Demand:
The appellant argued that the demand was time-barred u/s 11A of the Central Excises and Salt Act, 1944. The Tribunal held that since the goods were clandestinely removed and not accounted for, the extended period of five years applied. The Tribunal referenced Rule 196 of the Central Excise Rules, 1944, stating that the appellant failed to account for the goods, thus liable to pay duty.

Validity of Demand and Imposition of Penalty:
The Tribunal confirmed the demand of Rs. 21,78,399.10 and the penalty of Rs. 5,00,000 imposed on the appellant. The Tribunal dismissed the appeal, holding that the demand and penalty were in accordance with the law.