1993 (10) TMI 188 - AT - Central Excise

Issues Involved:

1. Removal of processed fabrics without payment of duty.
2. Removal of processed fabrics without proper gate pass and accountal.
3. Failure to account for processed fabrics in records.
4. Confiscation and redemption fine of seized fabrics and vehicle used for transportation.
5. Duty demand based on discrepancies in records.
6. Penalty imposed on appellants.

Issue-Wise Detailed Analysis:

1. Removal of processed fabrics without payment of duty:

The appellants were alleged to have removed 3,39,328.08 LMs of processed man-made fabrics without payment of duty. The department's intelligence indicated that the appellants were manipulating the totals of individual pieces and showing less quantity in the gate passes. The Collector confirmed the demand for duty on the alleged excess quantity of processed fabrics cleared in excess of the quantities covered by gate passes, after allowing certain arithmetical errors.

2. Removal of processed fabrics without proper gate pass and accountal:

An intercepted consignment of processed fabrics revealed a discrepancy where 58 pieces of fabrics admeasuring 925.80 LM were indicated in the documents, but physical verification showed 1225.80 LM, indicating an excess of 300 LM being cleared without proper gate passes. The Collector ordered confiscation of 1225.80 LMs of processed fabrics but allowed redemption on payment of fine. The liability to confiscation of the tempo used for transporting the fabrics was also upheld.

3. Failure to account for processed fabrics in records:

The officers found 222.30 LM pieces of processed fabrics in the bonded store room, whereas the excise records showed a nil balance. The Collector ordered confiscation of these fabrics but allowed redemption on payment of fine. The appellants contended that these fabrics were found in the finishing room and were not ready for delivery, but no evidence was produced to support this contention.

4. Confiscation and redemption fine of seized fabrics and vehicle used for transportation:

The Collector ordered confiscation of 1225.80 LMs and 222.30 LMs of processed fabrics, allowing redemption on payment of fines of Rs. 3,000/- and Rs. 500/- respectively. The tempo used for transporting the fabrics was also liable to confiscation, and a sum of Rs. 2,500/- was appropriated towards the redemption fine in terms of the bond executed for provisional release of the vehicle.

5. Duty demand based on discrepancies in records:

The appellants argued that the department could not find any discrepancy in the delivery challans and gate passes to confirm excess quantities cleared. They provided year-wise accountal of the alleged excess sales under various heads and produced detailed statements explaining the discrepancies. The Collector, however, rejected these explanations, citing manipulation of records. The Tribunal found that certain areas were not properly considered by the Collector and remanded the case for further consideration, directing the Collector to verify the records and reconcile the discrepancies.

6. Penalty imposed on appellants:

A penalty of Rs. 1 lakh was imposed on the appellants. The Tribunal set aside the penalty, allowing the Collector to redetermine the quantum of penalty after taking into account the extent of duty involved and other violations confirmed by the Tribunal. The Tribunal directed the Collector to complete the adjudication within six months and urged the appellants to cooperate in the reconciliation process.

Conclusion:

The appeal was disposed of with the Tribunal remanding the case back to the Collector for de novo adjudication on the major demand for duty, with directions to consider the appellants' explanations and reconcile the discrepancies. The Tribunal upheld the confiscation and redemption fines for the seized fabrics and the tempo but set aside the penalty, allowing for its redetermination. The Collector was directed to complete the adjudication within six months, with the appellants' cooperation.

← Previous Next →