1993 (12) TMI 125 - AT - Central Excise

Summary

Issues: Detection of irregularities in stock and accounts during a search at the factory premises, duty demand on excess and clandestine removal of glass and glassware, validity of explanations provided by the appellants, imposition of penalty.

Analysis:

The case involved a search conducted by the Directorate of Revenue Intelligence and the Central Excise Department at the factory premises of the appellants, licensed manufacturers of glass and glassware, leading to the discovery of irregularities. These irregularities included shortages, excess stock, and non-accountal of finished goods. The appellants' authorized signatory admitted to the discrepancies, attributing them to the absence of a partner due to a family bereavement. A duty demand was confirmed by the adjudicating authority, along with confiscation of goods and imposition of penalties.

Upon appeal, the appellants sought a decision on the merits of the case. The Tribunal examined the records and heard arguments from both parties. The main focus was on the duty demand related to the confirmed charges of removal based on seized chits during the investigation. The appellants contended that the irregularities were due to factors beyond their control, such as the absence of a partner and lack of knowledge about the factory's operations.

The Tribunal considered the explanations provided by both parties. While the appellants claimed that the excess stock was from the previous day's production and goods mentioned in the seized chits were removed without their knowledge, the adjudicating authority rejected these explanations. The Tribunal found the appellants' explanation regarding excess stock implausible, emphasizing the need for duty payment at the time of removal after entry in the records. The charge of clandestine removal was upheld due to lack of evidence to refute it, but the demand was restricted to a period of six months prior to the show cause notice date.

In conclusion, the Tribunal ruled that duty on excess goods should be paid upon removal after proper record entry, upheld the charge of clandestine removal, and limited the demand period to six months before the show cause notice. The appeal was disposed of accordingly.