2000 (12) TMI 683 - AT - Central Excise

Issues Involved:
1. Alleged clandestine removal of goods.
2. Non-accountal of scrap/waste.
3. Difference in recorded production and actual stock.
4. Compliance with natural justice and procedural fairness.
5. Validity of the extended period for issuing a show cause notice.
6. Confiscation and penalty imposed on the appellant.

Issue-wise Detailed Analysis:

1. Alleged Clandestine Removal of Goods:
The Central Excise Officers discovered a truck carrying empty drums under the cover of Central Excise GPI No. 1959/8-10-88. Subsequent checks at the appellant's premises revealed discrepancies in the statutory records, suggesting clandestine removal of 345 drums. Further scrutiny indicated that the appellant had manufactured and removed 17,441 drums without accounting for them in the RGI register, thereby evading duty. The adjudicating authority confirmed these findings, noting that the appellant failed to provide a satisfactory explanation for the discrepancies.

2. Non-accountal of Scrap/Waste:
The investigation revealed that the appellant did not account for 211.168 M.Ts. of scrap/waste in the RGI register. The appellant argued that there were separate registers for duty-paid and exempt scrap/waste, which the officers allegedly did not inspect. However, the adjudicating authority found no evidence supporting the existence of such separate registers and concluded that the appellant had failed to account for the scrap/waste properly.

3. Difference in Recorded Production and Actual Stock:
The appellant's records showed a significant difference between the production reports and the RGI register. The production reports indicated more production than recorded in the RGI, leading to an excess of 17,441 drums. The appellant attributed this discrepancy to differences in the method of recording production in the production reports and the RGI register. However, the adjudicating authority rejected this explanation, noting that the appellant did not provide any evidence to support their claim.

4. Compliance with Natural Justice and Procedural Fairness:
The appellant contended that the principles of natural justice were not followed, as they were not given a fair opportunity to present their case. They argued that the adjudicating authority ignored their request for adjournment and proceeded with the hearing in their absence. The adjudicating authority, however, noted that the appellant was given multiple opportunities to present their case, including access to relevant documents and the chance to inspect and take copies. The appellant's failure to appear for the hearing, despite clear instructions, was deemed to be at their own risk.

5. Validity of the Extended Period for Issuing a Show Cause Notice:
The show cause notice was issued on 4-4-89, covering the period from November 1987 to February 1988. The appellant argued that the extended period for issuing the notice was not justified. However, the adjudicating authority found that the appellant had engaged in fraud, wilful mis-statement, and suppression of facts with the intent to evade duty. Consequently, the extended period for issuing the show cause notice was deemed valid.

6. Confiscation and Penalty Imposed on the Appellant:
The adjudicating authority ordered the confiscation of 211.168 M.Ts. of scrap/waste and imposed a redemption fine of Rs. 1 lakh. Additionally, a penalty of Rs. 2.50 lakhs was imposed on the appellant. The confiscation of land, building, plant, and machinery used in the manufacture, production, storage, and removal of the offending goods was also ordered, with a redemption fine of Rs. 50,000/-. The appellant's arguments against these penalties were rejected, as the adjudicating authority found sufficient evidence of non-compliance with Central Excise laws and procedures.

Conclusion:
The appeal was dismissed, and the adjudicating authority's order was upheld. The appellant's contentions were rejected due to the lack of satisfactory evidence and failure to comply with procedural requirements. The findings of clandestine removal, non-accountal of scrap/waste, and discrepancies in production records were confirmed, justifying the penalties and confiscations imposed.

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